Full Description

Martha Stewart Living Omnimedia, Inc. is an integrated media and merchandising company providing consumers with content and products. The Company operates in four business segments: Publishing, Internet, Broadcasting and Merchandising. The media and merchandise encompasses eight areas: cooking and entertaining, holidays, crafts, home, whole living, weddings, organizing and gardening. During the year ended December 31, 2008, the Company announced a multi-year agreement with HarperStudio to publish 10 Emeril Lagasse branded books.

Publishing

During 2008, the publishing segment accounted for 58% of the total revenues, consisting of operations related to magazine and book publishing. The Company launched Martha Stewart Living in 1991, which is published on a monthly basis with a rate base of 2.025 million. The magazine appeals primarily to the college-educated woman between the ages of 25 and 54 who owns her principal residence. Martha Stewart Living offers lifestyle ideas and original how-to information in a highly visual, upscale editorial environment.

The Company launched Martha Stewart Weddings in 1994. Martha Stewart Weddings targets the upscale bride and serves as an important vehicle for introducing young women to the brands. Martha Stewart Weddings is distributed through newsstands.

In September 2003, the Company launched Everyday Food after publishing four test issues. This digest-sized magazine featuring quick, easy recipes was created for the supermarket shopper and the everyday cook. In August 2004, the Company acquired certain assets and liabilities of Body + Soul magazine and Dr. Andrew Weil’s Self Healing newsletter, which are the publications featuring natural living content. During 2008, the Company increased the frequency of Body + Soul to 10 issues.

In addition to the periodic magazines, the Company publish special interest magazine editions. The special interest publications provide advice and ideas around a particular topic in one of the content areas. During 2008, the Company published Good Things for Kids, Outdoor Living, Good Things for the Healthy Home, Handmade Holiday Crafts, Holiday Entertaining and three Body + Soul specials.

Merchandising

The merchandising segment consists of operations relating to the design of merchandise and related packaging, promotional and advertising materials, and the licensing of various trademarks, in connection with retail programs conducted through a number of retailers and manufacturers. Pursuant to agreements with the retail and manufacturing partners, the Company is responsible for the design of all merchandise and/or related packaging, signage, advertising and promotional materials. The retail partners source the products through a manufacturer base and are mostly responsible for the promotion of the product. The licensing partners source and/or produce the branded products together with other lines they make or sell.

Martha Stewart Everyday is a mass-market brand. The label is associated with the products that comprises home, which includes sheets, towels, pillows, bath accessories, window treatments and kitchen textiles; garden, which includes outdoor furniture and accessories; kitchen, which includes cookware, bakeware, utensils, dinnerware, flatware and beverageware; keeping, which includes organizational products relating to the pantry, closet and laundry; decorating, which includes mirrors, picture frames, candles and lamps; ready-to-assemble furniture, which includes living, dining, bath and bedroom furniture, and holiday, which includes artificial Christmas trees, decorating products, wrapping and ornaments.

In September 2007, the Company launched the Martha Stewart Collection at Macy’s. The Martha Stewart Collection line encompasses a range of home goods, including bed and bath textiles, housewares, casual dinnerware, flatware and glassware, cookware, holiday decorating and trim-a-tree items. The Company own the Martha Stewart Collection trademark and retain all intellectual property rights related to the designs of the merchandise, packaging, signage and collateral materials developed for the various programs.

During the year ended December 31, 2007, the Company announced the partnership with 1-800-Flowers.com to create a new, co-branded floral, plant and gift-basket program. The Company launched the co-branded floral and plant program in April 2008. In October 2008, the Company launched the co-branded gift baskets program.

In December 2007, the Company introduced co-branded food with Costco’s private label brand, Kirkland Signature as part of a two-year relationship with Costco. During 2008, the digital photography product business was managed by and reported in the merchandising segment as a licensed retail partnership.

In May 2007, the Company launched the Martha Stewart Crafts products at over 900 Michael’s stores. In August 2007, pursuant to the licensing relationship with EK Success, Limited (EK Success) and GTCR Golder Rauner, LLC, the Company began distributing product to certain independent craft stores across the United States. The Company also have a Martha Stewart furniture program. The merchandise produced under this relationship includes furniture for the living room, bedroom, and dining room that is sold at furniture and department stores, including certain Macy’s stores.

The Company launched the Emerilware by All-Clad in August 2000. The Emerilware by All-Clad consists of lines of gourmet cookware and barbeque tools available at department stores and specialty retail outlets across the United States, as well as through the Home Shopping Network. The Company launched the Emerilware by T-FAL in November 2006. The Emerilware by T-FAL is a line of small kitchen appliances available at department stores and specialty retail outlets across the United States, as well as through the Home Shopping Network. In September 2000, Emeril Lagasse introduced with B&G Foods, Emeril’s Original, a range of seasonings, salad dressings, basting sauces and marinades, mustards, salsas, pasta sauces, pepper sauces, spice rubs, cooking sprays and stocks is available at supermarkets and specialty markets across the United States, as well as through the Home Shopping Network.

Internet

During 2008, the Internet segment accounted for 5% of the Company’s revenues. The Internet segment is composed of three businesses: online advertising sales at marthastewart.com, product sales of Martha Stewart Flowers, and digital photography product sales. The marthastewart.com Website offers recipes and how-to content, integrated across the Martha Stewart brands in food, entertaining, holidays, home and garden, crafts, weddings, pets, and whole living. In 2007, the Company relaunched the site with a new platform. The site relaunch and subsequent releases included the development of advanced search, community tools, and the creation of photo galleries and Martha Stewart’s blog.

Originally launched in 1999 as marthasflowers.com, the Website marthastewartflowers.com continued to operate under the business model of providing fresh floral products shipped directly from farms to consumers. This business model enabled customers to ship floral gifts overnight, delivering Martha Stewart-inspired designs with freshness. In 2007, the Company chose to partner with 1-800-Flowers to create a co-branded floral, plant and gift-basket program.

During 2008, the Company entered into an agreement with pingg, an online invitation and event management site. The Company also entered into a commercial agreement related to software, design licensing and media sales. Visitors to the pingg site can create online invitations for their events by incorporating the beautiful imagery and photography for which the Martha Stewart brand is known.

Broadcasting

The broadcasting segment accounted for 17% of the total revenues for the Company in 2008. The segment consists of operations relating to the production of television programming, the domestic and international distribution of the library of programming in existing and repurposed formats, revenue derived from the provision of talent services, and the operations of the satellite radio channel. The Company own the copyrights in the programs it produces for television and radio distribution.

In September 2005, the Company launched the The Martha Stewart Show, a syndicated daily lifestyle series hosted by Martha Stewart. During 2007, the Company announced agreements with Scripps-owned networks, including the primetime rebroadcast of The Martha Stewart Show on the Fine Living channel on a one-day delay from the initial syndicated broadcast. In 2008, the Whatever Girls, a popular duo on the Martha Stewart Living Radio channel on SIRIUS Satellite Radio, started a new show called Whatever Martha! The program airs on the Fine Living cable channel and includes commentary on classic clips of Living.

During 2008, the Company entered into an agreement with Discovery Talent Services LLC pursuant to which Emeril Lagasse provides talent services for the television series Emeril Green airing daily on Discovery’s Planet Green network. Additionally, the Company acquired certain television agreements in connection with the April 2008 acquisition of specific Emeril Lagasse assets and entered into additional agreements related thereto.

In November 2005, the Company launched the Martha Stewart Living Radio channel on SIRIUS Satellite Radio. The channel provides programming 24 hours a day, seven days a week.

The Company competes with Wal-Mart, Target, Kohl’s, JCPenney, Bed Bath & Beyond, Home Depot, BJ’s and Sam’s Club.