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Stewart's way: Content, commerce and cookery

You might not think that relentlessly promoting the virtues of handmade goods, gourmet cooking and tasteful decorating is much of a plan for ecommerce success, but US lifestyle guru Martha Stewart has already made more money out of the Web than you ever will. "The e-world has taken hold, but community is not really where it's all going," she tells Angus Kidman during a break from counting her stash.

Published in APC,
June 2000

If content is no longer King online, then somebody forgot to tell Martha Stewart.

More or less unknown in Australia, Stewart is a national icon in the US, a respected authority on lifestyle, entertaining and decorating who also happens to be one of the most visible corporate executives in America. Australia would have to combine Tonia Todman, Stephanie Alexander, Paul Clitheroe and Ita Buttrose, seasoned with a dash of Ziggy Switkowski to come even close.

In Australia to speak at the annual Magazine Publishers of Australia Conference, the hyper-confident Stewart is enthusiastic about the potential of ecommerce to transform all kinds of businesses (including, naturally, her own), and doesn't appear to subscribe to the conventional theory that Australia is running several steps behind the US in Net matters. "The same things are going on here that are going on back home," she said. "The e-world has taken hold."

Stewart is chairperson and CEO of Martha Stewart Living Omnimedia (MSLO), a company which encompasses magazine publishing (flagship lifestyle title Martha Stewart Living ships 2.3 million copies a month), a daily television show, radio spots, catalogue sales, and merchandising through both upmarket (The Gap) and downmarket (Kmart) shops. And then there's the Net.

The MSLO Web site, http://www.marthastewart.com/, was initially designed to provide detailed instructions for television viewers, but has now expanded to support all of MSLO's activities, providing everything from fact sheets for radio to supplier details for products featured in the magazine. There are also lots of opportunities to buy Stewart-branded products (from bed linen to garden implements to marzipan sculpture kits). The site has an estimated 1 million registered users.

MSLO presents an old-fashioned view of the world in which handcrafts, cookery, gardening and the occasional meticulously planned wedding reign supreme. A case in point is a recent cover story for Martha Stewart Living that gave detailed instructions on how to make toy animals out of pom-poms. However, Stewart seems to have had her finger on the technology pulse for some time.

She demanded electronic rights from her publisher when her first book, the best-selling Entertaining, was published in 1982, at a time when the concept was largely unheard of. Her magazines present a world view in which handmade is always better than machine-made, but she bemoans the fact that nobody has yet come up with a PDA (personal digital assistant) that's actually useful to the average household (she was due to view a new prototype from Intel when she returned to the US after her Australian visit, but her hopes weren't high). Her magazine stable has worked with digitised images since inception, although she's still looking for a decent database system for storing and searching images.

MSLO is, perhaps inevitably, exploring new opportunities for broadband and wireless content, although Stewart foresees one obvious and much-discussed obstacle. "It's a real problem for established companies to get Web staff," she said. "Once ecommerce takes hold in a major way, you're going to have trouble getting the right people for the right jobs. Having public stock to offer is very important" -- a fact Stewart acknowledged with an IPO for MSLO last October.

The return of content

The prevailing business model for the Web is based on taking existing content and adapting it to an online medium (a media-centric approach), picking up some transactional revenue along the way. The quality of the content tends to be a secondary consideration. Stewart prides herself on MSLO's approach, which emphasises the quality of content above all else. The company's eight divisions -- entertaining, decorating, gardening, crafts, holidays, housekeeping, weddings and babies -- focus on core content areas. Each division is responsible for all coverage of that topic, be it on TV, in print or online -- and even the development of associated Martha Stewart-branded retail products.

Of course, in the online sphere it helps that the kind of material Stewart pedals -- recipes for healthy chicken dishes, craft projects, hints on how to clean your window screens -- doesn't suffer from the rapid turnover and massive change typical of other Web areas such as news or technology information. "The content is evergreen, and it will never go out of date," she notes with evident satisfaction. "That's the kind of content we want; nothing gimmicky." The company also relentlessly sells Stewart (a former model) as the human face of that content, a strategy which has proved successful for other media giants such as Oprah Winfrey and Walt Disney.

While Stewart's focus on independent content development rather than partnerships ("we've never just licensed our name to anybody for anything") may appear unfashionable in an era of mega-mergers, she believes it's beginning to pay dividends as the importance of branding on the Web becomes clear. She also foresees a shift in the power base currently enjoyed by major portal sites.

"A year ago, you would have paid AOL a lot of money to be on its front page," she said. "Now that's all changed." It's clear Stewart would be happy to promote her content through such a vehicle, but she wants complete control and financial recompense which is appropriate to the value of that content. You get the feeling that if AOL didn't come to the party, she'd be in no way concerned.

In one way, however, Stewart subscribes to the prevailing Net model. She views content as a useful means to build trust and then drive people to buy associated branded products. Currently, sales from the Martha by Mail print catalogue easily outstrip Web sales, but that's changing fast. "Sales are migrating beautifully to the Internet. Ultimately, we'd like to make our [print] catalogue a 'mag-alogue' that drives people to the site." MSLO has also invested in BlueLight.com, a company developed by Softbank, Kmart and Yahoo in the US that plans to use free ISP services to bring people to ecommerce.

The critics

Unsurprisingly, Stewart has her share of detractors. Critics have attacked her for her unabashedly middle-class viewpoint and highly prescriptive advice (her detailed explanation of how to iron a shirt drew gasps of amazement at the MPA conference, especially from women in the audience, who don't generally go to these kinds of events for an explanation of where the yoke on a shirt is and why you need to press it).

The market itself has been a little surer since MSLO went down the IPO path last year. Shares in MSLO doubled on listing last year, and remain above issue price, although the company was not immune to April's Wall Street slump.

Stewart's relentless pursuit of new revenue opportunities doesn't always gel with the Web's broader community ethos. "I suddenly got wistful for the counter-culture after listening to Martha," commentator and occasional hippy Richard Neville commented at an MPA session following Stewart's presentation, before suggesting that two-thirds of the archetypal Stewart audience were on Prozac.

Stewart herself seems unfazed by such criticisms. "[Community] is not really where it's all going," she predicted when musing on the Web's future. So what will people do with their time online if they don't connect with one another? "Ecommerce and the accessing of good, reliable information."

Of course, there are obvious flaws in that strategy. Despite Stewart's proclamation that the whole MSLO organisation is geared to "giving people what they want, how they want it, when they need it", the cult of personality on which the company is built and its distinctly US-centric world view may make it hard for MSLO to replicate its success globally (it is exploring opportunities in the Australian market).

She also seems entirely unperturbed by questions of editorial integrity raised by her moves into merchandising. Once your main business is selling products, not information, how can you be sure that the information has any purpose other than to make you buy those products? Is that spring cleaning tip really useful, or just a subtle way of inducing you to buy Martha's kitchen brush set?

Stewart's success appears to be built on a model that doesn't allow for such doubts. Asked by a conference delegate for the most important lesson she'd learnt, her message was simple: "Persevere with an idea." Even if the idea is making pom-pom animals.

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