Hallmark Chief Makes His Case

1/04/2008 7:00 PM Eastern

Henry Schleiff turned around Court TV, which was sold in 2006 to Time Warner Inc. Since then, Schleiff has been working to build up another independent network, Hallmark Channel, which has been plagued by low license fees and undesirable audience demographics. Strong ratings and a new carriage agreement with Comcast, the largest cable distributor, should start to change that, he told editor in chief Tom Steinert-Threlkeld on Dec. 10.

MCN: You’ve had your highest ratings ever in the last two weeks. Why?

Henry Schleiff: The last two weeks is symptomatic of our ratings for the year. Certainly we always do well in the fourth quarter especially around the holidays, because Hallmark is associated with Christmas, Thanksgiving and the major holidays.

MCN: How does this impact your negotiations, also at this time of year, for renewals of license-fee arrangements?

HS: The answer is that our original programming and indeed our mix of off-net series and movies, our ratings and, most of all, our unique appeal to an important demographic for the cable operator or satellite provider enables us to go in and say, we’re important, we’re important to your subscribers, in an environment where Wall Street is substantially penalizing cable operators for loss of video subscribers, every quarter.

MCN: So where do things stand in renegotiating with DirecTV, Time Warner Cable and Cablevision Systems, and does whatever “arm and a leg” that you gave away to Comcast inform those negotiations?

HS: It was an important agreement, not only to secure our largest distributor, but, candidly, I think it helps define the parameters of some of the other distributors of some of the other large distributors.

MCN: As an independent network, are you in favor of compulsory arbitration with any of these distributors?

HS: We are of the belief that it would be nice to have in the background. [But] private disputes are best settled privately.

MCN: Is what the NFL Network doing as an independent network, trying to get legislators to step in and force agreements for basic distribution of independent channels, helping or hurting your cause?

HS: I can’t speak for the NFL because I think, quite frankly, it’s a very different set of facts. It’s limited to [a more] seasonal appeal, with substantially greater demand on their part in terms of a licensing fee [and] it’s a very unproven entity.

On all three of those, I would distinguish the appeal of Hallmark Channel, which is a year-round network, proven to be in the top 10 across the board and asking literally for pennies, as opposed to what the NFL is asking for.

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