Martha Stewart's Big Move From TV Star to Web Stalwart

Martha Stewart, a bust on daily TV, seeks her fortune on the Web
The challenge is making thousands of hours of video advice easily searchable for Web users Illustration by QuickHoney

Remember when Martha Stewart seemed on the verge of media overexposure? No longer. Hallmark Channel this summer ended her daily TV show, the September issue of Martha Stewart Living magazine has almost 40 percent fewer ad pages than last year, according to Media Industry Newsletter, and her company seems headed toward its fifth consecutive year of red ink. At less than $3, Martha Stewart Living Omnimedia shares are worth a mere 8 percent of the $40 they hit after she took it public in 1999, serving orange juice and brioche to New York Stock Exchange traders. In today’s world, where Bravo’s Real Housewives throw tables, who wants to watch someone calmly teaching people how to repair one?

Rather than pack up her cookbooks and craft bags and head home to Connecticut or the Hamptons, America’s most famous homemaker is remaking her brand into one focused heavily on the Internet. On Sept. 10, the company announced new partnerships to extend its content online, including a Martha Stewart Network with programs featuring Martha and chef Emeril Lagasse (another MSLO brand) on video-streaming services Hulu and Hulu Plus, a deal to distribute shorter video clips on the AOL On Network, and a partnership with digital media company Fullscreen to rev up Martha’s presence on YouTube.

While none of her online deals match the buzz of a daily TV slot, building a bigger Web presence is likely a better fit for a brand that’s become less about personality than timeless tips on how to create the good life. It’s also a strategy that plays to Martha’s often-overlooked strengths in merchandising, where her name moves everything from dog collars at PetSmart to paint at Home Depot to china cabinets at Macy’s. Licensees marketed more than 8,500 MSLO-related products last year, and J.C. Penney, which recently bought 17 percent of Stewart’s company, is betting that more Martha-endorsed goods will lure shoppers to its soon-to-be revamped stores.

Martha didn’t prove a good fit with Hallmark. It serves up sentimental fare for older women while the 71-year-old Stewart actually appeals to a younger crowd. (If you don’t know how to carve a turkey by age 50, it’s a good bet you don’t care.) Daily TV production is also pricey, to the point where Robert Routh, executive director of equity research at Phoenix Partners Group, says that if broadcasting losses end, “that could make the company profitable.”

With Internet content and commerce converging, a huge library of do-it-yourself videos could be golden. The challenge is being able to slice and dice it so it’s searchable, easy to access, and drives product sales for advertisers. That’s what MSLO Chief Executive Lisa Gersh is focusing on: The company has reengineered its website and revamped more than 2,500 hours of video content to make it more evergreen.

Going forward, Stewart’s company wants to compete in a world where success is not determined by her charisma but by how well a Martha Stewart Living Chrysanthemum Malted Wool Area Rug compares with other rugs at a store or, increasingly, online. It’s a world where product placement creates a different kind of celebrity; where putting together an intimate wedding for stars like Blake Lively and Ryan Reynolds (as Martha Stewart Weddings magazine just did) does more for the bottom line than teaching them to make omelets on national TV. “We’re lucky in the sense that we have her as the ambassador,” says Gersh, “but the brand attributes of Martha Stewart are well established.”

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