Lunch with Henry Schleiff: "Advertisers should be taking Willie Sutton's advice"

The CEO of Hallmark Channel is in Kansas City today for the premiere of "Moonlight and Mistletoe," one of 30 original movies it will air in 2008. Henry Schleiff is a well-liked, personable and chatty media CEO who -- thanks to the location of Hallmark Channel's No. 1 investor -- comes to KC every now and then. It's always fun to talk about the business with Henry before we move on to his talking points about Hallmark and people wanting to watch well-told stories on TV and all that.

Henry's very good on message -- I don't mean to disparage that -- but you just know you're going to get those Willie Sutton and Deep Throat references at some point in the lunch. (Follow the money: got it!) Still, in a crazy media environment, Henry and Hallmark are turning a profit by getting advertisers -- most famously the Hillary Clinton campaign -- reason to buy time on their channel.

"The Clinton people were very clear: first and foremost it was our audience of women, our 25-to-54-year-old women," said Schleiff as we had the steak soup. "And during the election, you know, people think we must have a Republican audience, but we ended up with political dollars from both Obama and McCain." Hallmark Channel's audience is also typecast as being from "C and D" areas -- no, I didn't know what those were, either, but someone out there is coding America's population centers on a scale from A (the biggest cities) to D ("the hinterlands," as Schleiff put it). Anyway, Hallmark does just as well in "A" and "B" markets as it does in places the size of Kansas City on down.

Hallmark Channel made $50 million this year. And next year, Schleiff expects Hallmark to throw off even more, $80 million, which is not bad for a network that you don't hear much about. And in an economic downturn, why shouldn't Hallmark expect a banner year?

"There are going to be a lot of people at home," said Schleiff. "They may not have an income, but they have money."

In fact, Hallmark's original movies are reliably pulling in 2 and 3 share points in total viewers, and even allowing for the advanced age of the audience, a large enough chunk of those viewers fall in the 25-to-54-year-old demographic that Hallmark is actually putting a scare into other networks.

I found that out when I asked Henry about Lifetime. You may not have noticed, but the "channel for women" has started airing original movies on Saturday nights ... just like Hallmark does. "Personally, I'm not happy about it," he said about Lifetime encroaching on his turf -- though he also admitted to having lunch recently (at Michael's, I'm guessing) with Andrea Wong, the head of Lifetime. Anyway, "they're going after a slightly more tabloidy, younger audience," said Henry. Plus, he has the satisfaction of knowing that his movies play well on more nights than just Saturday. He's re-running most of his Saturday premieres the following Friday, and his ever-growing library of original titles means he can bank some pretty solid numbers with original programming two or three times around the block. It's one of the reasons he launched Hallmark Movie Channel, which is in 15 million homes expected to grow to 25 million ("easily") in 2009.

"These movies double our demo across the board," said Schleiff, when compared with acquired programming. Not that their acquisitions are anything to sneeze at. After Lifetime cast off "Golden Girls," which was huge for them over the years, "Andrea was not happy to see us pick it up." Schleiff said Lifetime has been holding Hallmark to strict deal terms in promoting the arrival of "Golden Girls" at Hallmark. Hey, you can't stop Bea Arthur -- you can only hope to contain her.

"When the critics write reviews of our movies, and the words 'predictable' and 'Kleenex' show up in the first two sentences, I'm happy," said Schleiff, a little ironically I think. The point is, Schleiff is happy to hue to a formula because it creates a brand loyalty that is second to none in the business. He can point to research showing that Hallmark Channel consistently ranks first or second in terms of "viewer engagement" -- i.e., how long you have the damn thing tuned in. Well, when you specialize in two-hour movies, you're going to get that. But it's the way the repeats perform that impresses Schleiff the most.

"When AMC goes out with a season of 13 'Mad Mens,' that's very expensive -- and they're difficult to repeat. They don't do well in repeats. If we're doing 30 movies a year, that's two seasons of 'Mad Men,' and they do well in repeats!" Actually, Henry, that's four seasons of "Mad Men," since Hallmark movies are two hours instead of one. And Schleiff's goal is to grow that production to 50 movies, one for practically every weekend of the year, which he can do now that Hallmark is finally starting to squeeze those rate increases out of cable operators.

"You can't get a cable operator interested in anything that has to do with video," kvetched Schleiff. "They are so singularly focused on all the other uses of bandwidth other than the one they brought to the dance." But that Henry, he's a persistent one. Spend five minutes talking to him about Hallmark Channel and you will hear at least twice him talking about the content.

"People fundamentally are looking for well told stories," he said. "I am not going to mess with the formula for Coke. That's something that works very well for us."

It's the Eyewitness News formula, essentially -- team up a "classic," i.e., older, celebrity (Ernest Borgnine, Jacqueline Bisset) with a younger and more of-the-moment actor/actress (Jason Gedrick, Catherine Bell). And it works. And as the largest producer of television movies, Hallmark Channel can't afford to tamper with the formula, even as it attempts to lower its median audience age.

Schleiff said he has started to recruit new producers now that the Halmi family no longer controls most of the channel's movie production. Craig Anderson, who made the "Hallmark Hall of Fame" movies "The Piano Lesson" and "O Pioneers," is producing the "Moonlight and Mistletoe" holiday movie that's getting a premiere tonight at Hallmark Cards.

"The one thing I've harped on is script. It's got to be on the page. Since we were talking about politics before, I'll reach back there for a phrase. You can't put earrings on a pig. Your programming has to be attractive."

Comments

[kmb]

Last year, during the holiday season, I mostly watched Hallmark and Lifetime for their holiday-themed movies, switching back and forth between the two. It made the season for me.

I hope they do the same irresistible programming this year. I file it under "Things I Actually CAN Watch with the Children."

[mattack]

Jason Gedrick is of the moment? Did we jump back to 1995 and "Murder One" being on again??

[I like to use that old line I first read in Michael Kinsley's assessment of Al Gore in 1988: Jason Gedrick is an old person's idea of a young person.--AB]