Mr. Schleiff Goes to Washington - Broadcasting & Cable

Mr. Schleiff Goes to Washington

The Hallmark Channel plans to open a D.C. front in its fight for higher sub fees
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Hallmark President Henry Schleiff, former president of Court TV, says he's looking to hire a high-powered D.C. lobbyist to capitalize on indecency and media-ownership issues. He wants to push the channel's value as a family-friendly destination for which cable systems should be willing to pay fair market value.

Currently, Hallmark averages about 4¢ per sub. Schleiff says this is undervalued, and they have to get more for their channel, preferably the same amount as comparably rated networks. Cable operators are likely to see the move as mere opportunism.

"This is an important enough initiative for us to highlight the disconnect between our value to the viewer and the cable network for which we are not being paid," says Schleiff.

Hallmark needs to start making some more money to help pay off some big debt for parent Crown Media.

Schleiff points to the "increasing drumbeat of concern about what is on television and how there is not enough support financially for family-friendly programming."

FCC Chairman Kevin Martin, for one, has been pushing for more family-friendly programming on cable. Is Schleiff concerned that, by trying to capitalize on the indecency crackdown to up its sub price, it will have to tacitly support that policy?

Schleiff sees it another way: "I think we are absolutely the poster girl for family-friendly programming. This is not about condemning others.

"The other side of the coin"

"This is not about an agenda that says particular networks or particular shows have too much sex or violence. This is about the other side of the coin."

But coin is the operative word.

"It is a business issue," Schleiff concedes. "In a world of choice, the fact that the seventh-highest-rated network in primetime can't get fair license fees, [means] you are looking at a cable network that is already $1.2 billion in debt that is going to have to either close up shop or find some other way to survive."

Schleiff blames the regulatory environment and the "retransmission ransom" process that he says favors the big players able to bundle their networks into the deals, which hurts consumers who have to pay for networks they don't want.

Doesn't that lead to the à la carte argument that cable has been fighting against? Yes, says Schleiff.

Wearing his industry hat, he is not in favor of à la carte, he says.

But wearing the hat of someone trying to save his network, he is ready to "shine a kleig light" on the issues in Washington.

He says he does not want to invite regulation but suggests that could be the consequence: "If they start to see the problem that is evidenced by Hallmark, then those who would wish to regulate us really begin to create some arguments."

Hallmark also plans to raise the issue of media concentration.

"We represent one of the last of the last voices of the independent networks," says Schleiff. "There is not a lot left out there, for a lot of seasons. And if we can't survive, the voice of diversity will be completely stultified."

So, if operators decided to give Hallmark the 16¢ or 25¢ or 30¢ per sub that comparable networks get, would that government-relations guy go away?

"It's not so much about whether it goes away or not," he says. "We're not the first network to have government-relations people down there. We had them at Court TV. In fact, I think their absence is conspicuous."

Finding kid-friendly shows

Schleiff also sees the indecency issue getting higher visibility in the run-up to the 2008 elections: "I think what really hits home is parents being a little ticked off that they can't find programming to watch with their kids. I think that is an issue that is going to resonate in Congress.

"When people start to say, 'I just sat down and this Nip/Tuck smut is on. Where are networks that carry stuff I can watch?'"

He says he thinks that cable operators are going to get more calls saying "not only are your bills too high, but you're not carrying enough family-friendly programming.

"I think you're going to get more calls like that, and we're going to help them make those calls."

E-mail comments to jeggerton@reedbusiness.com

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