In seeking carriage renewals for Hallmark Channel, Henry Schleiff plans to stress the value of the Baby Boomer generation, the network’s target demographic, in discussions with cable operators.
Former Court TV CEO Schleiff Wednesday was named president and CEO of Crown Media Holdings, the parent of Hallmark. He replaces David Evans, who left the company in June, several months after Crown failed to find a buyer for the basic network.
Schleiff’s name first surfaced as a candidate for the Crown CEO post in July (www.multichannel.com/article/CA6352951.html). His appointment prompted one Wall Street analyst to speculate that Schleiff will ultimately wind up finding someone to acquire Hallmark, and that the buyer will be Time Warner.
“We continue to think that the days of independent networks are over, and that Hallmark Channel belongs as part of a larger organization,” Robert Routh, a Jefferies & Co. analyst, wrote in a report Wednesday. “To that end, we wouldn’t find it unreasonable for Mr. Schleiff to sell it to the same buyer that bought Court TV, namely Time Warner [another player]. We would expect him to have to fix things organizationally and financially first, though.”
Schleiff said Hallmark’s challenges are very similar to those he faced when he joined Court TV -- an independent network like Hallmark, not fully owned by a major media giant -- in October 1998. At the justice channel, he built up its ratings and carriage, took down its median age and solidified its shaky distribution.
Schleiff wants to lower Hallmark’s median age, which is in the 60 range, aiming to target the boomer 25-54 group. While most cable networks are courting those 18-49, the older demographic is the one with the buying power -- those who will not only pay for video service, but who are potential customers for high-speed data and phone, according to Schleiff.
“The guys paying the bills, I think you want to keep on your side of the equation,” he said. “Given the upcoming negotiations and ongoing negotiations with operators, it is in their own interest to highlight the value of the Hallmark viewership to them, both currently in terms of video subscribers and their potential for the ancillary services.”
Schleiff, who will remain in New York, has his work cut out for him: Crown has an enormous amount of debt, in the $1 billion zone; it has to do contract renewals representing 80% of its distribution in the next two years; and it needs to hike its license fees.
“Now the question is: Can we create deals that are sensible for both the operator and for Hallmark Channel?” he said.
He added that he’s unperturbed that Crown couldn’t find a buyer for 74.7 million-subscriber, top-10-rated Hallmark this year.
“It doesn’t bother me at all,” he said. “They were asking a premium price for the network, and I think at the time they asked for that price, the marketplace had legitimate questions. I think they did the right thing in taking it off.”
Schleiff stepped down from his role as Court TV CEO, taking the title of nonexecutive chairman in May after Time Warner bought the remaining 50% stake it didn’t already own in the justice network from Liberty Media. Time Warner paid $735 million to secure full ownership of Court TV.