The Hallmark Channel is defying every trend in media by owning Christmas

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Starting this weekend, the Hallmark Channel is rolling out 33 original Christmas movies. These movies have helped it defy industry trends that are hurting rival networks.
The company's formula allows it to crank out movies in three weeks for roughly $2 million each.
Most of the films are shot in the summer: "I’ve gotten used to being really hot and sweating in my boots," says Lacy Chabert, a recurring star.
Advertisers and viewers are drawn in because they know exactly what they're going to get.

Roger left his big New York City newspaper job to head back to his Vermont hometown to take over the family newspaper right smack in the middle of the Christmas season.

Once there, he and his high-school rival, Samantha, now the anchor for the local news station, wound up chasing the biggest story of the year: What will happen to the town's Christmas-tree farm, which is set to be razed by developers? Will they save the farm, get the big story, and keep from falling for each other? Find out on "Christmas Scoop," starring Mark-Paul Gosselaar and Jennie Garth.

OK, this isn't a real movie. But if you've ever heard of the Hallmark Channel, you can picture the whole thing.

The cable network is set to release the first of 33 original Christmas movies — most featuring a pair of recognizable TV stars meeting cute near the mistletoe — this weekend — before we're even done with Halloween.

Hallmark, it seems, has never stopped saying Merry Christmas, and it's how the network, owned by Crown Media, is defying every trend in the media business. It has milked the Christmas stories to consistently deliver strong live ratings (meaning people watch when the movies are broadcast, not later, say, over the internet), while its rivals grapple with cable cord-cutting and competition from streaming services.

If you aren't familiar, here are two examples of the kinds of films we're talking about:

2015's "A Crown for Christmas" starring Danica McKellar ("The Wonder Years") as a recently fired New York exec who ends up working for, and falling for, a prince during Christmas.
2016's "A Wish for Christmas" starring Lacey Chabert ("Mean Girls") as a woman granted a wish by Santa Claus, a wish that expires in 48 hours.

"Their movies are as comforting as programming can be. You can grab a blanket, enjoy a glass of wine, and know the movie will have a happy ending," said Brad Krevoy, a producer who has worked on theatrical movies such as "Dumb and Dumber" and "Threesome."

Very traditional media

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People are canceling cable subscriptions and ditching live TV for Netflix, Amazon, and other streaming apps.

Cable networks are striving to produce original prestige series at a time when there are upwards of 500 on the air. At the same time, mid-tier cable networks are struggling, and some, like Esquire, have disappeared. Everyone in media is trying to figure out where they fit on Facebook and Snapchat.

Not Hallmark.

"It's weird," said director Ron Oliver, who's worked on numerous Hallmark projects and logged time on Nickelodeon's "Goosebumps" in the 1990s. "With Hallmark, you actually turn on the TV at 8 p.m. and watch collectively. It speaks to a real need."

In 2016, Hallmark movies attracted over 2 million live viewers, though by November and December those numbers spiked to 4 million, according to Nielsen. The rating record was set by Candace Cameron Bure’s "Christmas Under Wraps," in 2014, and it actually just added a third cable network, Hallmark Drama, on top of its core network and Hallmark Movies and Mysteries – all part of the Crown Media Family Networks division of Hallmark Cards.

Crown Media president and CEO Bill Abbot chalks the success up to a commitment to the formula.

"The business has been so driven by trying to hit the home run, trying to replicate the success of 'The Walking Dead,'" he said. "Hits are very hard to find. That's a very risky strategy. And it's detrimental to the cable industry.

"People don’t know what they are going to get from original channels," Abbot added. "That’s what’s driving a lot of the decline in audience."

Taking back Christmas

The original cable Christmas movie wasn't Hallmark's baby. Rather in the mid-1990s, ABC Family kicked off the craze with its "25 Days of Christmas" franchise. That led to classics such as 2007's "Holiday in Handcuffs" featuring Melissa Joan Hart taking Mario Lopez hostage while he steals her heart— of course at Christmas time.

Though the Hallmark channel launched in 2001, Crown Media had made TV movies for decades for networks like CBS. But around 2011, as ABC Family (now called Freeform) leaned into targeting teens, Crown went after Christmas in a bigger way.

"We did look at what '25 Days of Christmas' had become in people's minds and said, 'Wait a minute. We have a brand and a hundred-year legacy,'" Michelle Vicary, EVP of programming & network program publicity, Crown Media Family Networks, said. "We should lean into that as much as we can and do more of it."

It started paying off immediately. Now Hallmark produces movies tied to Valentine's Day, fall harvest season, June weddings, and summer holidays. But starting October 27, it's pretty much all Christmas movies for the rest of the year.

"People started to say things to us, like, 'I turn in on right after Halloween and don’t turn it off until New Year's," Vicary said.

“In this day and age, with the multitude of programs, the notion of a strict adherence to one’s brand – that's friendly, inviting, and welcoming — is a huge plus," said Bruce Vinokour, a television agent at the Creative Artists Agency.

A feel-good Blumhouse

How exactly will Hallmark make 87 original movies this year, including 33 Christmas movies?

The company is known for being disciplined and deliberate. Hallmark typically shoots movies over about three weeks for $2 million — the price of some individual TV episodes or, as Oliver put it, "the catering budget for Transformers."

The network is almost like the Yuletide version of the much-admired low-budget horror studio Blumhouse.

Most movies are shot in Canada, where Hallmark gets tax breaks and other benefits from using local production crews. Vancouver is the biggest outlet, given its wintry milieu, though Hallmark has made movies in Toronto, Montreal, and, in some cases, Romania.

The timing is often tight. Actress Lacey Chabert said she shot a movie last summer that aired four weeks later.

When Business Insider talked to director Ron Oliver in mid-October, he was in postproduction on "The Christmas Train" (Danny Glover, Dermot Mulroney), which is scheduled to run in late November. Oliver was still writing "Reindeer Games," which he's shooting in November for a December airdate.

"It's literally down to the wire," he said. "But I always remind people: They shot 'Casablanca' in 18 days."

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Christmas is good business

Kagan, a media-research group within S&P Global Market Intelligence, estimated that Hallmark reeled in $431.3 million in revenue between advertising and affiliate fees from cable distributors. That's up from less than $300 million in 2012.

To put that in context, Lifetime's revenue is roughly double that of Hallmark's, but net operating revenue from 2012 to 2016 has remained relatively flat, $876.4 million to $875.4 million, Kagan estimates.

Advertisers have noticed Hallmark's ascendancy.

"If you look at cable in general, there are ratings declines all over the place. And every fourth quarter they are growing. It's kind of incredible," said Keri Feeley, SVP and group partner of integrated investment at the ad-buying firm UM.

Marketers are particularly drawn to Hallmark because the content is considered safe. And for viewers, "They always find actors that remind you of your childhood," said Feeley.

Familiar faces

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There's something of a debate over who is the record holder for most Hallmark Christmas movie appearances — between Candace Cameron Bure (who became a star on "Full House"), Lori Loughlin (also from "Full House"), and Lacey Chabert ("Party of Five" and "Mean Girls"). Though Danica McKellar (Winnie Cooper from "The Wonder Years") is coming on strong, said Vicary.

"It's tough to say," Vicary said. "Lori Loughlin owned August."

Chabert did her first Hallmark movie in 2010: "Elevator Girl" (a guy and a girl get stuck in an elevator). Her first Christmas movie was "Matchmaker Santa," and she estimates she's done eight or nine since.

"The way their company works is a family and it mirrors their product," she told Business Insider. "They really care about what they’re putting out."

Still, Chabert said that the shooting schedule is like "boot camp" in that you "eat, breath, and sleep the movie."

"It's intense — it’s hard to make a movie in 15 days. They know what they are doing," she told Business Insider.

Chabert said that for whatever reason, most of her Christmas movies have been shot in the summer.

"That's fine by me," she said. "I’ve gotten used to being really hot and sweating in my boots."

Make it snow

One thing that can't be different: "You have to have snow," Vicary said. That's nonnegotiable.

Visual-effects expert Luc Benning has worked on several Hallmark projects. There are a few ways to make snow happen, even in August. Options include using:

snow blankets (which look like car-seat cushions, Benning says)
fire-retardant foam (increasingly popular)
a papier-mâché-like product called a Krendl (tough to clean up)
crushed limestone (increasingly popular out West)
ice shavings from ice blocks
snow from the machines that ski slopes use (extremely heavy)

"The past couple of years Hallmark’s really liked the look of the foam," said Benning, who often works on four and five Hallmark movies back to back. A snow budget might run a Christmas production about $50,000, he said.

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Then there's the snow needed for actor close-ups. Sometimes, that means soapy bubbles.

Oliver said he was shooting a scene with Candace Cameron Bure that was supposed to be during a blizzard. So he used a machine that blew soapy bubbles into the air that looked like snow during close-up shots. "He hair was literally concrete," said Oliver. "And she had soap in her mouth."

Plus, because of the noise that the machine made, the actress had to reshoot her dialogue later "with the same emotion and cadence," he said. Oliver has a way of helping his actors deal: stops at the Shameful Tiki Room bar in Vancouver.

Christmas future

As Hallmark pushes its original output to the limit, the question will become, how do you not run out of ideas?

One way to keep things moving is by doing sequels: "Finding Father Christmas" in 2016 has led to this year's "Engaging Father Christmas" (and eventually "Marrying Father Christmas").

"My biggest challenge is finding good scripts and good writers," Abbot added. To help, the company has launched a book division that will serve as something of a farm team for future movies.

Meanwhile, programming chief Vicary said she's already talking to her team about projects for Christmas 2018.

For his part, Oliver said he's often wondered if he'll ever end up Christmas'd out. But then he gets together with his family and gets right back into the spirit.

"I always have this huge meltdown on Christmas Eve," he said. "But I love it. It's really about the core idea of people getting together. Underneath it all, we do know the importance of it."

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