Major Media Companies Greet Hallmark Channel in New Bids

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Crown Media Holdings Inc. is expected to entertain a second round of bids for its Studio City-based Hallmark Channel later this month after initial meetings in November with some of the biggest names in the entertainment business.


Crown has been in talks with potential investors who are interested in buying the four-year-old, family-friendly network that’s known mostly for homespun original content as well as older network retreads. The network is now in 71 million U.S. homes, up almost 10 percent from last year. The Hallmark Channel’s third-quarter ratings were the network’s highest ever, and subscriber-fee revenue skyrocketed 90 percent over last year to $4.6 million.


“We’ve done incredibly well in just four years,” said Hallmark Channel spokeswoman Nancy Carr. “We are in the top 10 in both primetime and day ratings.”


Even so, Crown Media reported a third-quarter loss of $65.8 million, compared with a loss of $105.8 million for the like period a year earlier. One problem has been the company’s cost of services, which increased 43 percent in the third quarter, to $77.9 million, from the like period a year earlier.


Crown announced that it was considering a sale of the network in August, when it filed with the Securities and Exchange Commission. The announcement came shortly after the company sold off Hallmark’s international TV operations.


Citigroup is handling the network auction, which is expected to fetch around $1 billion. Crown received several nibbles from some big names last month, including Walt Disney Co., Time Warner Inc., Viacom International Inc. and News Corp.


Crown Media is controlled by Hallmark Entertainment Holdings Inc., a unit of Kansas City-based Hallmark Cards Inc.



Radio Infomercials


WorldLink, a Los Angeles-based media sales firm that represents more than 200 national, regional and international cable networks, broadcast stations, syndicators and radio stations, is taking the radio infomercial format to about 1,500 stations nationwide.


The company specializes in direct marketing and infomercial-type advertising: two- to three-minute spots for products or services that are perennial staples of late-night television, such as thigh-firming machines and wrinkle-reducing face cream.


WorldLink announced plans for a partnership with Interep National Radio Sales Inc., a New York sales and marketing company that is the parent to radio representation firms ABC Radio Sales, D & R; Radio and Infinity Radio Sales. (The firms represent groups of stations in making ad sales.)


The goal is to lure national advertisers to the radio infomercial format, and allow the advertisers to capitalize on a kind of captive audience, since more than 95 percent of Americans listen to the radio each week.



Hot, Hot, Hot


It’s official: Spanish television is hot so hot that commercial advertising buyers finally seem to be waking up to it.


Total U.S. ad spending grew by 4.5 percent in the first three quarters of 2005, compared with a 16.7 percent jump on Spanish-language television, according to a Nielsen Media Research report released last week.


Even so, the Association of Latino Advertising Agencies is taking big advertisers to task for not buying into the Latino market. About 40 percent of the top 250 television and print advertisers are spending less that 1 percent of their budgets in the Latino market.


“Some of America’s most iconic brands such as Apple, Maytag and Nike are missing in action,” said Carl Kravetz, Hispanic Advertising Agencies foundation chair, in a statement. “Considering that nearly a quarter of all children in America are Latino, it just doesn’t make good business sense.”



SkyFall


Los Angeles-based Gemstar-TV Guide International announced that it sold its SkyMall business which publishes magazines found in seat-back pockets on airplanes.


Los Angeles-based Gemstar said it sold SkyMall Inc. for $52 million to Spire Capital Partners and two affiliates, Greenspun Media Group of Las Vegas and ZelnickMedia, with offices in New York, Santa Monica and Tokyo, in a deal that closed Dec. 1.


ZelnickMedia is a management investment group of five former media and entertainment executives who purchase and turn around underperforming or underutilized assets, said Scott Siegler, one of the company founders.


The group has purchased six other companies, and Siegler said there are plans are to tweak the SkyMall magazine format to increase buyer appeal.


“SkyMall is now used primarily as a retail property,” Siegler said. “(The airline travel) audience is a fairly upscale, captive one and it presents a unique opportunity for us.”


SkyMall, the country’s largest in-flight catalog, sells wares to airline travelers on 14 U.S. airlines, reaching an estimated 650 million air passengers every year. The company was acquired by Gemstar in 2001 for about $48 million.



This and That


The local magazine market is now home to yet another glossy, luxury lifestyle magazine. Sunday Luxury debuted Nov. 20 and was delivered to homes in Bel Air, Beverly Hills, Brentwood, Westwood, Santa Monica, Pacific Palisades, Holmby and Cheviot Hills, among wealthy target areas, according to the magazine’s Web site. The magazine is an oversized, glossy tabloid and 115,000 copies will be distributed to Westside areas each Sunday, replete with display ads, special inserts and product promotion samples. The site claims the magazine will reach some 2 million readers monthly who have an average per capita income of $1.7 million


The Los Angeles Times recently sold out the paper’s business section to a single advertiser American Express Co. The 16-page section in the Nov. 29 edition featured three double-truck and two single-page ads, one on the back of the section. Single-sponsor advertising has been on the increase in magazines, though it’s still unusual in newspapers


Robert Dowling, publisher and editor-in-chief of the Hollywood Reporter, will be leaving at the end of the year to open his own consulting firm after a 17-year tenure with the publication. Dowling will start The Bob Dowling Group to serve clients in entertainment and technology. VNU Business Media Inc., the parent company of the Reporter, has signed a three-year contract as Dowling’s first client, VNU and Dowling said in a joint statement.



*Staff reporter Anne Riley-Katz can be reached at (323) 549-5225, ext. 230, or at

[email protected]

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