Two Hallmark TV channels go dark for 2.5 million AT&T U-verse customers

About 2.5 million AT&T U-verse television service customers lost their access to the Hallmark channels Wednesday, the latest dispute in a high-stakes scrimmage between TV programmers and the cable, satellite and telephone companies that carry their signals.

The two Hallmark channels, which concentrate on family programming, went dark on AT&T’s system at 9:01 p.m. Tuesday after AT&T and Crown Media Holdings Inc. of Studio City failed to reach a new carriage agreement. The blackout occurred less than two weeks before the launch of Hallmark’s high-profile programming makeover starring lifestyle maven Martha Stewart.

The two sides could not agree on how much AT&T should pay to carry the Hallmark Channel and the Hallmark Movie Channel. Meanwhile, two industry giants — Time Warner Cable and Walt Disney Co. — this week have been wrangling over fees for Disney’s entertainment channels, including the ABC network. Earlier this year, in a similar dispute, Disney pulled its ABC signal from Cablevision customers in New York on the day it was broadcasting the Academy Awards.

“Hallmark has forced us into a position where we no longer have the rights to carry the Hallmark channels,” AT&T said in a statement. “We don’t want customers to lose their programming, but we believe strongly that our customers should not have to pay more than their fair share for Hallmark’s channels.”

Crown Media, which is controlled by Hallmark Cards Inc., said it was willing to resume negotiations “as long as they are fair and in good faith,” Hallmark Channels Chief Executive Bill Abbott said in a statement.

Abbott declined to say how much Hallmark was seeking from AT&T for the right to carry its two channels.

Hallmark has been struggling to get distributors to pay more for its channels in an effort to staunch red ink that the company has accumulated in its nine years of existence. In the early days, Hallmark nearly gave the channel away to get on cable systems, and in some cases paid distributors for carriage.

The Hallmark Channel receives an average of 6 cents per subscriber per month, according to consulting firm SNL Kagan. That’s considerably less than such competitors as the A&E Network, which receives an average of 25 cents per subscriber, SNL Kagan said.

Until late Tuesday, the Hallmark Channel was available in nearly 90 million homes and the Hallmark Movie Channel was available in about 38 million homes.

meg.james@latimes.com