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Under Pressure, Stewart Shifts Company’s Focus

June 16, 2013 by Leave a Comment

Then, with two publicists struggling in her wake, she dashed down hallways filled with the scent of freshly baked chocolate gingerbread cookies to work in a conference room before heading to a talk at the 92nd Street Y.

Ms. Stewart’s schedule may be as busy as ever, but Wall Street wants to know when all of this baking, publishing and public speaking will turn into profits for her company, Martha Stewart Living Omnimedia. In response, the company is redesigning its Web site and flagship magazine, and Ms. Stewart, 71, says she is “trying to evolve.”

While tabloids and television shows have focused lately on Ms. Stewart’s online dating, analysts have been more concerned with the company’s latest earnings report, which shows that it lost $3 million in the first quarter. Those losses emerged from across the company, including the flagship magazine, Martha Stewart Living — which has had a 35 percent decline in newsstand sales so far this year — and sheets and glassware sold at Macy’s.

The company’s merchandise division remains tied up in a lawsuit after Macy’s sued it, along with J. C. Penney, over whether Penney’s could also sell her housewares. On top of all that, the company has not had a chief executive since February.

Taking on the challenge, Ms. Stewart is returning to what she knows best: design.

On Monday, the company is releasing on iPad its redesigned July/August issue of Martha Stewart Living, which will be on newsstands next week. The redesign features pared-down presentations of recipes, like how to grill a fish, and shorter instructive features, like how to make friendship bracelets.

The magazine’s editor in chief, Pilar Guzman, said “the days of 1,000 word front-of-book stories are over.”

By month’s end, the company will overhaul its Web site to feature shorter videos on crafting and cooking topics. Executives are hoping that these early steps will help drive advertising revenue to Martha Stewart Living magazine and the company’s Web site.

“We understand that people are coming for short, consumable bites of information,” said Joseph Lagani, the company’s chief revenue officer. “People are not spending an hour with you. They’re there to get something.”

The redesign represents a large shift for Ms. Stewart, who built her reputation and her company largely on the strength of her cut-no-corners approach to cooking and crafts.

“I don’t want to retire,” Ms. Stewart said as she sat in a conference room framed by views of the Hudson River. “We’re trying to help figure it out. I don’t think it’s anything to run away from. I’m not banging my head against a stone wall here.”

In part, the redesign is an attempt to hang on to the magazine’s readers and artisans ages 18 to 34 who have become loyal fans. And like many publishers, the company is betting that video can help solve the online advertising riddle.

“That approach of putting cooking techniques near our recipes in video form has done really well,” Mr. Lagani said, “and many of our advertisers want to be part of that.”

Like many publishing executives, Ms. Stewart concedes she thought her magazines would have experienced more digital growth by now. “Publishing is a serious conundrum — advertisers don’t know what they’re doing,” she said, but she remains optimistic about digital publishing. “It’s very profitable to print digitally,” she said, adding that she believes that readers will embrace online editions.

Ms. Stewart returned to her company’s board in 2011 after a five-year ban from serving on a board or as an executive of a publicly traded company. Since then, her company has been scaling back in the hopes of returning to profitability. In early 2012, the company cut $12.5 million in broadcasting costs by not renewing its daily programming deal with the Hallmark Channel. It also broke its lease on its television production studio and ended its live audience for “The Martha Stewart Show.” The company also announced that a new weekly show, “Martha Stewart’s Cooking School,” would be distributed on public television.

In November, the company’s chief executive, Lisa Gersh, announced she planned to cut back two of its four magazines and lay off about 70 employees. In December, Ms. Gersh, after less than one year on the job, said she would step down so the company could find a chief to focus on finding more money in merchandising. The board is still looking for her replacement.

“It’s going to be hard to get your arms around the next phase of the company until senior management is in place,” said David Bank, an equity research analyst with RBC Capital Markets. “They’re doing a good job of treading water until they’re ready to do that. But it’s not that interesting to Wall Street.”

Merchandising revenue was 30 percent of total revenue for the company in the first quarter of 2013 (publishing made up 65 percent), a rise from 27 percent in the first quarter of 2012.

Mr. Bank thinks that because the company’s standards remain so high for all of its products, from its blueberry muffin recipes to Ms. Stewart’s new MarthaPantry line at J. C. Penney, the company has potential to expand its merchandising business abroad.

“The underlying quality of the products tends to be marketable outside of people who know about Martha,” Mr. Bank said. “She will be able to develop scale in the international market just based on quality.”

But the company still doesn’t know if J. C. Penney will be part of its merchandising future.

“It’s awful,” Ms. Stewart said about the lawsuit. “We’re waiting for a decision.”

Article source: http://www.nytimes.com/2013/06/17/business/media/under-pressure-stewart-shifts-companys-focus.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Rupert Murdoch in Spotlight at Inquiry as Celebrities Testify

November 29, 2011 by Leave a Comment

On Monday, that changed, at least briefly. Two celebrities testifying at a government-appointed inquiry into the activities of the country’s newspapers cited Rupert Murdoch, 80, the chairman of the News Corporation and James Murdoch’s father, in what they described as their abusive experiences at the hands of tabloids owned by the News Corporation, including The News of the World and The Sun.

Charlotte Church, a popular Welsh-born singer, told the panel appointed by Prime Minister David Cameron that her reputation was “shattered” while she was in her teens as a result of articles in the Murdoch tabloids, some of which she said were false, about her teenage drinking, her boyfriends and an extramarital affair of her father’s, reports of which, she said, had prompted her mother to attempt suicide.

She said the harmful coverage followed an incident at the beginning of her professional career in which she was pressed to do a personal favor for Rupert Murdoch to encourage positive coverage in his newspapers. She said her management and a record company advised her to waive a fee of £100,000 — equivalent to about $160,000 at the time — to sing at the 1999 wedding of Mr. Murdoch and Wendi Deng, his third wife, aboard his yacht in New York Harbor.

Ms. Church, then 13, said she had wondered why anybody would waive such a large fee, but had gone along with the arrangement, in which she sang three songs, after advisers told her it was a way of encouraging “good press” from the Murdoch papers.

“I was being advised by my management and a certain member of the record company that he was a very, very powerful man and could certainly do with a favor of this magnitude,” Ms. Church said.

A lawyer representing News International, the News Corporation subsidiary that operates the company’s papers in Britain, disputed Ms. Church’s account before the inquiry panel, which is headed by Lord Justice Brian Leveson. A spokeswoman for News International said in a telephone interview that the company “denies that there had been any such agreement” as the one described by Ms. Church, adding that Ms. Church’s appearance at the wedding “was a surprise for Rupert Murdoch.”

Another witness, Anne Diamond, a journalist and television anchor, said Murdoch-owned newspapers had waged a vendetta against her after she confronted Rupert Murdoch in a television interview in the 1980s. She said she had told him that “his newspapers were intent, or seemed to be intent, on ruining some people’s lives, and how did he feel about that, and how could he sleep at night knowing that that was going on?”

This year, Ms. Diamond said, she saw a television documentary that featured a former butler of Mr. Murdoch’s saying that Mr. Murdoch had told editors of his papers that Ms. Diamond was “from that point onwards to be targeted.” The spokeswoman for News International said the company had no comment on Ms. Diamond’s accusation.

Ms. Diamond offered a catalog of the abuse she said she had endured from the Murdoch papers, including a front-page headline in The Sun in 1987 that read, “Anne Diamond Killed My Father.” It was about an accident seven years earlier in which a man in a car she was driving had been killed. She said she had been exonerated by the police of any responsibility for the crash, but felt that the Sun article had portrayed her as “murderer.”

Article source: http://feeds.nytimes.com/click.phdo?i=ac66b6a13e682ec962e6b91d2fbc4298

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Murdoch Tabloids’ Targets Included Downing Street and the Crown

July 12, 2011 by Leave a Comment

Others on the police payroll have been bribed to use restricted cellphone-tracking technology to pinpoint the location of people sought by the papers in their restless pursuit of scoops, according to two former journalists for the tabloid shut on Sunday, The News of the World.

As Mr. Murdoch assumed command of damage-control efforts at his London headquarters, the day brought a torrent of new revelations, including reports that newsroom malpractice extended to two other newspapers in his British stable — The Sunday Times, an up-market broadsheet, and The Sun, the country’s highest-selling daily tabloid.

Phone-hacking and other illegal or unethical methods have been common at many British newspapers that are not Murdoch-owned. But the focus for now is on News International and its parent company in the United States, the News Corporation, which confronted what many have called an existential threat to the Murdoch empire on Monday by revising its $12 billion takeover bid for Britain’s most lucrative satellite television company, British Sky Broadcasting, in ways that appeared to delay it for at least six months.

Many commentators in Britain said Mr. Murdoch appeared to be playing for time, in the hope that public and political anger over the current scandal will abate, making room for politicians and regulators to judge the takeover on its business merits, and not on the basis of retribution for the hacking scandal.

The revelations about the intrusive activities directed at the queen and Mr. Brown have seized the headlines, driving home the realization that nobody, not even the most powerful and protected people in the land, has been beyond the reach of news organizations caught up in a relentless battle for lurid headlines and mass circulations.

A wide segment of British society, from celebrities to ordinary families wrestling with personal tragedies, has been shown to be potentially vulnerable to the newspapers’ use of cellphone-hacking, identity theft, tracking technology and police bribery — perhaps even clandestine property break-ins, if some reports circulating in recent days are true.

The BBC and The Guardian, in their Monday reports, cited internal e-mails from a News of the World archive in which requests were made for about $1,600 to pay a royal protection officer — one of several hundred Scotland Yard officers eligible to serve in the palace security detail — for classified information about the queen, Prince Charles and other senior members of the royal family in what a Scotland Yard official described as a major security breach. The Guardian article said two officers on the royal detail were involved and that the e-mails from an archive assembled by The News of the World were exchanged by a senior executive and a reporter, neither of whom it identified.

The accounts said the money was used to obtain a copy of a contact book used by the royal protection service — a volume known as the Green Book, according to the BBC — that contained information about the queen, Prince Charles, other senior royals and their friends and contacts. A report in The Evening Standard newspaper said the information included “phone numbers, and tips about the movements and activities” of the queen and her husband, Prince Philip. A Guardian report said the police had informed the palace that the cellphones of Prince Charles and his wife, Camilla, Duchess of Cornwall, may have also been hacked.

Prime Minister David Cameron said he was outraged, describing the alleged police involvement in the palace intrusion as “a dereliction of duty” and adding, “We need to get to the bottom of that if it is true.”

Mr. Brown said on his Web site that he was also a target. A person close to Mr. Brown said in an interview that the former prime minister believed that people working for News International, Mr. Murdoch’s British subsidiary, tried to hack into his personal voice mail and obtained other personal information, including financial accounts, tax records and the medical details of his son Fraser, now 5, who suffers from cystic fibrosis.

Ravi Somaiya, Don van Natta and Graham Bowley contributed reporting.

Article source: http://www.nytimes.com/2011/07/12/world/europe/12hacking.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

European Court Rejects Bid to Limit News on Celebrities

May 11, 2011 by Leave a Comment

The European Court of Human Rights in Strasbourg, France, on Tuesday struck down a legal bid to strengthen the privacy protections for public figures. At the same time, individuals have been turning to the Internet to circumvent British reporting restrictions that protect these figures, turning Twitter into a sort of WikiLeaks for celebrity tell-alls.

In the Strasbourg decision, the European court rejected a bid by Max Mosley, former president of the governing body of Formula One auto racing, to require news organizations to notify the subjects of articles before publication. The court said such a requirement would have had a “chilling effect” on freedom of speech.

The lawsuit stemmed from a 2008 article in The News of the World, a racy British tabloid, with the headline “F1 boss has sick Nazi orgy with 5 hookers” and was based on video shot secretly by one of the participants.

Mr. Mosley, a son of Oswald Mosley, former leader of the British Union of Fascists, sued The News of the World, saying the paper had not bothered to check the story with him before publishing. A British court called the article a flagrant invasion of Mr. Mosley’s privacy and fined the paper £60,000, or nearly $100,000. The court said there was no evidence of Nazi behavior in the sex session and thus no justification for publication.

When confronted by tabloids with similar exposés, or simply with allegations of garden-variety extramarital affairs, many British celebrities have gone to court to secure injunctions against publication. In some cases, these injunctions even bar newspapers from acknowledging the existence of the court order.

Even before the European court ruling on Tuesday, however, such injunctions were being undermined by a force that is arguably more powerful than British privacy law: the Internet.

Since the weekend, Twitter has been abuzz with speculation about public figures who may have obtained such court orders. An unidentified user of the service posted six short messages in which he or she listed well-known soccer stars, actors and others who had supposedly received injunctions preventing the press from reporting on suspected affairs.

By Tuesday evening, the Twitter feed had attracted about 80,000 followers.

British newspapers have been lobbying against the use of these injunctions, denouncing them as one of a number of perceived threats to freedom of speech in Britain, along with the country’s tough libel laws.

“Highlighting the perceived evils of British privacy and defamation law certainly seems to be paying off for Fleet Street,” said Amber Melville-Brown, a media specialist at the law firm Withers in London.

The government recently introduced legislation to overhaul the defamation laws. On Tuesday, officials said they were considering changes to the privacy laws, too, in an effort to bring them into the digital age.

“We are in this crazy situation where information is available freely online that you are not able to print in newspapers,” Jeremy Hunt, the British culture secretary, said. “We are in a situation where technology, and Twitter in particular, is making a mockery of the privacy laws that we have, and we do need to think about the regulatory environment. It should be Parliament that decides where we draw the line on our privacy law.”

While Internet forums like Twitter, under European Union law, have generally not been held accountable for the information posted on them, individuals can be sued for comments that are libelous or that invade others’ privacy. But Twitter, like many other big Internet companies, is based in the United States, putting it outside British jurisdiction.

“People blogging and reporting online are subject to the same laws,” Ms. Melville-Brown said. “It’s just a question of enforcement.”

In his case before the European court, Mr. Mosley, the former president of the International Automobile Federation, argued that British media laws violated the European Convention on Human Rights by failing to protect him from intrusions into his private life. He sought a requirement that newspapers and other media give the subjects of their articles a chance to respond before the papers appeared on the newsstand.

The court rejected Mr. Mosley’s claim, saying there were already sufficient privacy protections in place in Britain.

“Although punitive fines and criminal sanctions could be effective in encouraging prenotification, that would have a chilling effect on journalism, even political and investigative reporting, both of which attracted a high level of protection under the convention,” the court wrote. “That ran the risk of being incompatible with the convention requirements of freedom of expression.”

Mr. Mosley said he planned to appeal the decision to the Grand Chamber of the Strasbourg court.

Article source: http://www.nytimes.com/2011/05/11/business/media/11privacy.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,