Crown Media Holdings, owner of the Hallmark Channel and the Hallmark Movie Channel, is restructuring its operations to begin producing original TV series programming. For a decade, the Studio City-based company has been associated with making movies for television and using outside producers for the production of its television series. Starting next year, Crown plans to launch its first-ever original television series pilots based on best-selling book series from authors Debbie Macomber and Janette Oke, respectively. “Now that we are going into daytime and prime-time original programming there is a need to shift the burden to in-house development people,” said Crown spokeswoman Pam Slay. In the future, the company also may hire professionals to develop original programs. She declined to comment further on the restructuring efforts. Crown, a public company with a market value of about $571 million, has offices in New York City and employs about 173 employees companywide. It boasts a subscriber base of 87 million viewers, mostly women ages 25 to 54 — a key demographic for television advertisers who want to target consumers with the primary household purchasing power. By producing original TV shows, Crown has more flexibility for distributing content, allowing the company to reach a larger audience and drive advertising sales, said Michelle Vicary, executive vice president of programming, Hallmark Channel and Hallmark Movie Channel. For example, the company will be able to distribute original content via its cable stations, as well as online and through other distribution channels, she said. “When we look to owning, it is a priority to monetize the business and assets,” Vicary said. Target audience To date, Crown has produced more than a dozen original movies based on books by Macomber and Oke. The movies have drawn strong viewership among the highly desired audience demographic, prompting the company’s decision to produce the television series pilots, Vicary said. For example, “Debbie Macomber’s Trading Christmas,” which aired in November, had 635,000 viewers ages 25 to 54. “Call Me Mrs. Miracle,” also based on a Macomber tale, brought in 632,000 viewers in the desired demographic when it aired in November 2010. Oke’s “Love’s Long Journey”, which aired in December 2005, attracted 748,000 viewers ages 25 to 54; the company has aired 10 movies based on Oke’s book series. About 70 percent of media-buying agencies aim to reach women ages 25 to 54 years old, said Kal Liebowitz, chairman and founder of KSL Media, with offices in Encino. “You are going to pick up the 55-plus audience anyway, because there are more of them and they watch more television,” he said. Macomber’s pilot, called “Cedar Grove”, is scheduled to air next March. “When Calls the Heart” from Oke is planned to air in summer 2013. If the shows prove successful with audiences and advertisers, the company may consider other movie franchises, such as “The Good Witch” starring Catherine Bell and “Goodnight For Justice” with Luke Perry, for new television series. New investments Crown has been able to invest in the programming strategy through revenue and earnings gains, as well as by reducing its outstanding debt load, said Chief Financial Officer Andy Rooke. “Our continued earnings growth and improved financial position will allow us to expediently move towards our leverage goal while providing funds to continue investment in our programming strategies,” Rooke said in a prepared statement. For the fourth quarter ending Dec. 31, Crown had net income of $29.9 million, or 8 cents per diluted share, on revenues of $99.6 million. In the same period for the previous year, the company reported net income of $29.5 million, or 5 cents per diluted share, on revenues of $90.7 million. Crown was among four cable networks with double-digit advertising revenue growth in the fourth quarter. Advertising sales account for the majority of Crown’s revenues. In the fourth quarter, the company had $80.7 million in advertising, an 18 percent increase over the $68.2 million from the fourth quarter 2010. New daytime shows In another effort to drive ad sales and revenue growth, the company announced it is making changes to its daytime lifestyle block, which airs from 10 a.m. to 3 p.m. Crown is replacing “The Martha Stewart Show” and other programs supplied by the homemaking maven’s Martha Stewart Living Omnimedia, which fell short of audience draw expectations. New shows airing in the lifestyle block this fall are “Marie!” hosted by singer and actress Marie Osmond, and “Home & Living,” a two-hour live program broadcast from Universal Studios. “Home & Living” is a revived version of a show that originally aired on ABC and the Family Channel. “The Martha Stewart Show” began airing on the Hallmark Channel in September 2010 as part of a mid-day programming makeover. However, viewership for Stewart’s show ranged from 30,000 to 70,000 people. “We had hoped for higher numbers,” Vicary said. The current season will be the last for Stewart on the Hallmark Channel. The final show will air in May and reruns will continue through the summer. The Hallmark Channel will air two shows from Stewart’s production company through the end of the year.
Crown Media Restructures to Make Original Shows
