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Schmaltzy and sentimental, even sappy, but definitely a staple of the Christmas season, Hallmark movies have become a holiday tradition for millions of viewers.
From humble beginnings, the familiar entertainment franchise has carved out a profitable niche in a challenging media landscape by understanding its audience and delivering a consistent product. Since 2011, Hallmark’s Countdown to Christmas beginning in October has signaled the unofficial commencement of the holiday season. It also represents a classic American success story.
It begins with a young Nebraska boy named J.C. Hall. At age 8, he was selling picture post cards door to door to help support the family after his father died. In 1910, J.C. dropped out of high school and moved to Kansas City with little more than two shoeboxes of postcards. His brother Rollie followed soon after and the two formed a company called Hall Brothers. A fire destroyed their office and inventory in 1915, but the disaster proved providential, as the brothers borrowed money to buy a printing press and begin producing their own products.
As sales of postcards declined, J.C. and Rollie began printing high quality greeting cards that were mailed inside envelopes. By 1928, the brothers were advertising nationally and began using the word “hallmark” on the back of each card. A hallmark is a stamp embossed on precious metals to attest to their quality, as well as a clever play on their surname.
One of the great branding decisions in marketing history occurred in 1944, when a sales manager jotted down a simple phrase on a 3×5-inch card: “When you care enough to send the very best.” The corporate name was officially changed to Hallmark in 1954, and in 1984 they acquired the Binney and Smith Corp., later renamed Crayola.
The first Hallmark Christmas TV broadcast was a very different affair than the formulaic feel-good fare currently on offer. The company had sponsored radio productions of stories from Readers’ Digest since 1946 and later funded adaptations of more serious literature under the name of the Hallmark Playhouse. Then in 1951, the National Broadcasting Co. approached Hallmark with a proposal.
NBC had commissioned composer Gian Carlo Menatti to write a one act opera specifically for TV and convinced Hallmark to sponsor the broadcast. On Dec. 24, 1951, “Amahl and the Night Visitors” debuted live on NBC to rave reviews and viewer accolades. The event marked the launch of a series called the Hallmark Television Playhouse, renamed the Hallmark Hall of Fame in 1953. The Hallmark Hall of Fame has earned a record 81 Emmy Awards, and “Amahl and the Night Visitors” is still presented hundreds of times each Christmas season. It is currently playing at Lincoln Center, and the original 1951 broadcast is still available on YouTube.
The company began producing its own content in 1991 and acquired a religious broadcaster called the Odyssey Network in 2001, which it rebranded as the Hallmark Channel. The company later added two other cable networks, Hallmark Mystery and Hallmark Family. Hallmark media divisions have produced over 900 original movies, including 300 Christmas films (or some might say one Christmas movie 300 times).
Hallmark has developed a profitable business model by relentlessly focusing on its target customer base, women ages 24 to 54, although its success transcends that market. While the Hallmark Channel has been the most watched entertainment cable network for 11 straight years among its target demographic, it also led in 2024 among all viewers 18 and above during the holiday season and boasts the top three most watched cable movies of the year.
The company’s Christmas franchise supports multiple revenue sources. Advertising alone generates over $600 million in revenue, according to the Ivey Business School. Advertising includes not only commercials but also product placements, where familiar consumer products appear in a film. Merchandise sales from greeting cards, Christmas ornaments and collectibles, as well as streaming revenue from its Hallmark+ subscription service also generate significant income.
The company rigorously manages production costs. Hallmark applies a standardized formula, sometimes referred to as the Hallmark “bible,” according to film director and consultant Stephen Follows, that serves as a template for script writing. Each movie is presented in nine acts to accommodate linear broadcast commercial schedules. Act one is the longest and serves to introduce the characters and set up the scene. Somewhere around act seven, conflict arises, which is inevitably resolved in the final act (usually with a kiss).
The average Hallmark Christmas film costs between $1 and $2 million to produce, compared with $150 million or more for a major Hollywood release. There are no A-list celebrities, although there is a stable of familiar faces, including some actors who have appeared in over 30 Hallmark productions. Total production time rarely exceeds three weeks, and the company cranks out over 30 new Christmas films every year.
While the plots usually involve small town America, most are filmed in locations near Vancouver, British Columbia thanks to Canadian tax credits to movie producers. Filming generally takes place during the summer, with cotton batting and fire retardant foam standing in for snow. In some villages frequently used as locations, July is more Christmasy than December.
New England serves as the second most popular filming location, led by Connecticut, which even promotes a “Connecticut Christmas Movie Trail,” a tour of the more than 20 locations within the state that have served as filing locations for Hallmark or other network Christmas productions.
Hallmark could serve as a business school case study on identifying and targeting a niche audience and executing on its marketing strategy. There is a broad audience that craves nostalgic and comforting stories of holiday spirit and reconciliation, no matter how that may vary from their own experience. The Hallmark Christmas movie franchise is a classic commercial example, but to millions of Americans, it represents a welcome and cheerful respite from the pressures of a busy and often stressful holiday season.
Merry Christmas, and enjoy the film.
Christopher A. Hopkins, CFA, is a co-founder of Apogee Wealth Partners in Chattanooga.