Hallmark Channel has been a defy-the-odds TV success story during the past decade, as the cabler has enjoyed ratings growth and a heightened pop culture profile for its unabashedly feel-good programming.
But behind the camera, the independent cable group owned by Crown Media Family Networks has faced an increasingly uphill battle on the distribution front as the pay TV landscape shifts. Hallmark already feels woefully undervalued in its subscriber license fees compared to some other channels with lower ratings that are owned by media mega-players.
On the latest episode of Variety podcast “Strictly Business,” Bill Abbott, president and CEO of Crown Media Family Networks, speaks candidly about the competitive disadvantage that Crown Media faces against larger competitors who have greater sway with distributors. The business climate has only gotten tougher following the latest burst of M&A in media.
“If we have a difficult time seeing a path forward in this linear environment, then there’s something wrong with the system,” Abbott says. He boldly calls out the 1992 Cable Act — which established the must-carry/retransmission consent framework for the carriage of local broadcast TV stations — “the root of all evil.” In Abbott’s view, the negotiation leverage provided to broadcast groups by the cable act has left less money in the ecosystem for smaller competitors such as Crown Media.
“I spend quite a bit of time in Washington, D.C. just creating the picture of that landscape and how it’s evolving and why as an independent group of channels it’s so important that legislation is created that doesn’t allow the broadcasters to monopolize these platforms,” he says.
At the same time, Crown Media has one of the few media companies to focus on the launch of a linear channel, Hallmark Drama, which began its rollout last year. Abbott also offers an update on the Hallmark Movies Now subscription streaming service, which is two years old this month. At a $5.99 monthly fee, the service is just barely break-even for Crown Media. He predicts a reckoning for the pricing of subscription services after the streaming wars cool off.
“There’s no way the economic model works if you’re creating this kind of volume of content,” Abbott says. It’s too much content at too low a price to be sustainable.”
(Pictured: Bill Abbott and Hallmark Channel star Happy the Dog, a rescue dog adopted by Abbott in 2017)