Crown Media Narrows Loss

STUDIO CITY, November 8: Crown Media Holdings’ third-quarter
loss has fallen from $84.3 million last year to $37.8 million, with a
17-percent gain in net revenue to $55.3 million, led by increases in
advertising and subscriber fee revenues for the Hallmark Channel.

Crown Media posted a 19-percent increase in third-quarter
advertising revenues to $47.8 million from $40.2 million in the same year-ago
period. Subscriber fee revenue in the third quarter rose 23 percent to $7.4
million from $6 million in the prior year’s quarter.

For the first nine months of this year, revenue at the
company climbed 15 percent to $164.8 million from $142.8 million in 2006, due
to a 17-percent increase in advertising revenue to $143.1 million and a
15-percent gain in subscriber fee revenue to $21.4 million. Net loss for the
period was down from $359 million to $121.7 million.

The number of Hallmark Channel subscribers grew 13 percent
to 84.5 million in the period ended September 30, from 74.7 million subscribers
a year ago. Since the beginning of the year, Hallmark Channel has added nearly
10 million new subscribers.

The company did not have licensing fees from its film
library during the quarter ended September 30, 2007, as it sold its film assets
in December 2006.

According to Nielsen, Hallmark Channel remains among the top
ten rated ad-supported cable networks in terms of household delivery. It ranks
eighth in prime time, tied with HGTV and Court TV, and tenth in total day. For
the year-to-date, Hallmark Channel ranked ninth in prime time, tied with
A&E, Nickelodeon and Court TV and tenth in total day, tied with A&E and
ESPN.

The company is also preparing for the March 2008 launch of
Hallmark Movie Channel HD, a simulcast feed of Hallmark Movie Channel which is
now distributed to nearly 10 million subscribers. Hallmark Movie Channel HD
will showcase Hallmark Channel original movies as well as more than 50 of the
award-winning Hallmark Hall of Fame movies in high-definition.

“The third quarter of 2007 was filled with more of the same
consistent and positive growth we have experienced to date this year,” remarked
Henry Schleiff, the president and CEO of Crown Media. “We are a top ten cable
channel with wholesome and appealing family friendly programming which
resonates with our viewers as evidenced by our record ratings this quarter,
with our distributors as supported by their widespread participation in our
affiliate advertising programs, and with our advertisers as demonstrated by the
significant increases we experience every quarter in both volume and pricing.

“We look forward to the fourth quarter as the highlight of
our year where we showcase the best of our holiday themed original programming
which typically provides us with our strongest quarter in terms of ratings and
profitability, driving us to a strong finish for 2007.”

—By Irene Lew