September 12, 2012
Remember when Martha Stewart was a victim of schadenfreude? No word better described the malicious glee that some took in Stewart's troubles amid an insider trading scandal.
That was a decade ago: A House panel requested a Justice Department investigation on Sept. 11, 2002. Back then, Stewart was the uncontested goddess of household arts, an awe-inspiring icon who could wield a glue gun and whip up brunch for 50 while building a multimedia empire. After a brief jail stint three years later, she got her own prime-time series and seemed bigger than ever.
Times have changed for Stewart: Hallmark Channel canceled her TV show; the September issue of Martha Stewart Living magazine has almost 40 percent fewer ad pages than a year earlier, according to Media Industry Newsletter; and her company has posted years of losses. 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 with orange juice and brioche in October 1999.
In a world where "Real Housewives" throw tables, who wants to watch someone calmly teach people how to repair one?
And yet America's most famous homemaker is forging deals that suggest her brand is far from dead. Just the opposite: Stewart is laying the foundation for a company that could finally become a global growth story. On Monday, the company announced new partnerships to extend its content online, including a Martha Stewart Network with selected programs on Hulu and Hulu Plus, a deal to distribute shorter video clips on the AOL On Network, and the services of media company Fullscreen in revving up Martha's presence on YouTube.
While none of that can match the buzz of a daily TV slot, building a bigger Web presence is 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 underappreciated strengths in merchandising, where her name now moves everything from dog collars at PetSmart to china cabinets at Macy's.
If hosting a talk show were critical for moving curacao-colored Martha Stewart towels, Macy's would probably not be fighting so hard in court to crimp her retail alliance with J.C. Penney - a rival that has also bought close to 17 percent of her company.
Martha's challenges in traditional media have obscured the strengths of her brand. It's no surprise that Hallmark didn't prove to be a good home for her daily show. The cable network tends to serve up sentimental fare for older women while Martha, 71, actually appeals to a younger crowd.
More important, it's expensive to produce a daily TV show before a live audience. As analyst Robert Routh of New York's Phoenix Partners Group points out, "If they can get to the point where broadcast doesn't lose money, that could make the company profitable. It could be a growth stock." - Diane Brady, Bloomberg
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