Hallmark Channel parent Crown Media pledged to reach cash flow break-even this year, after reporting total subscribers increased 16% in the first quarter from last year to 105.8 million worldwide, driving advertising revenues of $22.4 million in the first three months of the year.
In the U.S., Hallmark currently claims 51.3 million subs. In the first quarter, the cabler increased its total-day household ratings by 67% year-on-year.
Still, subscriber gains are hard-won for the general-entertainment family net, whose sub fee revenue in the first quarter dropped 12% from last year to $17.5 million.
Total net revenues for the three months ended March 31 were $42 million, up 6% from the same period last year, with a net loss of $46.7 million, down from $56 million in Q1 of 2002.
For the year, company said it was targeting total revenues of $205 million to $215 million.
To ease some of the fiscal strain, Crown Media orchestrated a tax-sharing deal with parent Hallmark Cards, whereby Crown’s tax losses will be credited to Hallmark Cards, which will pay 75% of the benefit to Crown in cash. So far, the company has received $21.3 million under this agreement and expects to pick up another $40 million-$50 million this year.