The carriage dispute between Hallmark Channels and AT&T’s U-verse has gone nuclear, with the telco giant dropping two Hallmark outlets from its platform at midnight on Tuesday.
The blackout comes less than two weeks before Hallmark Channel is due to launch a major makeover with the Sept. 13 addition of “The Martha Stewart Show” and other Stewart-themed programming to its daytime lineup.
AT&T said it offered to cut a temporary extension deal with Hallmark late Tuesday rather than yank the channels. Hallmark reps said AT&T rejected the cabler’s last offer.
The scuffling comes down to the money that AT&T pays to carry Hallmark Channel and Hallmark Movie Channel. According to cable biz estimates, U-verse most recently paid about 6¢ per subscriber per month to carry Hallmark Channel and much less for the movie channel, which is primarily stocked with reruns of Hallmark Channel made-fors. Like most cable programmers, Hallmark parent Crown Media has been pushing for subscriber fee gains in new carriaagreements with cable, satellite and telco TV operators — in part to help offset the recent softness in the advertising market.
The loss of U-verse won’t put a big dent in Hallmark Channel’s distribution base. U-verse has a subscriber base of 2.5 million homes, while the main Hallmark Channel is among the most widely distribbed basic cablers, reaching 90 million households.
Hallmark Channels prexy-CEO Bill Abbott said he was willing to restart negotiations at any time. Talks between the sides stalled late last week. “If they are really serious, my team and I are ready for truly fair negotiations,” Abbott said.
AT&T, meanwhile, blamed Hallmark’s push for higher fees for forcing the channels off U-verse’s air.
“We don’t want customers to lose their programming, but we believe strongly that our customers should not have to pay more than their fair share for Hallmark’s channels, which is exactly what Hallmark is demanding,” the company said in a statement.