Publishing revenues were down 17 percent, to $27.6 million. Broadcasting revenues were down 58.6 percent, to $2.7 million, reflecting “a strategic migration of [the] Broadcasting business away from the higher costs associated with daily live television production, in favor of investment in short-form video for digital formats and targeted broadcast initiatives.”

Merchandising was the report’s one bright spot, with revenues of $13.2 million, up 7.3 percent.

“Including the Publishing segment actions announced yesterday, we have taken actions designed to significantly reduce the cost structure of our print and broadcasting operations this year, an important step toward positioning MSLO for profitable growth,” president and CEO Lisa Gersh said in a statement. “We are transitioning our content operations to digital, mobile and video platforms that feature lower fixed costs and align with evolving consumer preferences for how and where they engage with our content. We are seeing some encouraging early results, particularly in video.”

Martha Stewart Living Omnimedia announced Thursday afternoon that it is laying off 70 of its roughly 600 staff members, ending the standalone publication of Everyday Food magazine and attempting to sell off Whole Living magazine.

Speaking at a paidContent 2012 panel Wednesday called “The Video Boom: What’s Next?”, media executives Rob Burnett and Lisa Gersh  approached the topic from two very different yet interesting perspectives.

As president and CEO of Worldwide Pants, Burnett controls a library of nearly 8,000 hours of programming, most of it comprised of 18 years worth episodes from CBS’ Late Show With David Letterman.

“We know the web is perfect for small chunks of comedy, and we have lots of it,” Burnett told moderator Chris Albrecht, who serves as creative director for paidContent parent company GigaOM. “Right now, we’re exploring ways to get all that content out into the world.”

For Gersh, president and CEO of lifestyle publishing giant Martha Stewart Omnimedia, the question is, “why bother?”

“Libraries aren’t cheap,” she explained. “Rights need to be cleared, then you need to digitize and tag everything and put it someplace. And a lot of the time that stuff is really old. The hairdos are old, the clothes are old, and it needs to be updated. I sometimes think it’s cheaper and easier just to make new stuff.”

This may be true for how-to cooking and gardening videos. For Worldwide Pants, however, age often works. “For some of the stuff we have, old is where the value is,” Burnett explained, “especially when you’re talking about Steve Martin’s first appearance on the show, or Jerry Seinfeld showing up when he was just a kid.”

Beyond the subjective discussion of the value of libraries, the panel — which also included cable business veteran Brian Bedol — discussed the virtues of the platform they’ve all come to rely on, YouTube.

Bedol, who now serves as founder and CEO of digital video production company Bedrocket Media Ventures, believes we might have already seen the launch of the last independent cable channel.

“To launch a cable channel, you need a satellite, a sales staff … you’re in the hole $50 million to $100 million before you even know you have an audience,” he said. “With YouTube, you can be distributed everywhere overnight, and you don’t need to make those binary decisions.”

Check out the rest of our coverage of paidContent 2012. Full archived video on livestream (registration required).

If your responsibility is to make money from content, what should you do next? If the answer was easy, we’d all be on vacation. It’s not — which is why several hundred execs in media, entertainment, information and technology will be at The TimesCenter in New York today for top-level discussion about what’s working, what hasn’t and what’s showing the most promise. We’re hosting a star-studded roster of digital media leaders, including News Corp.’s Jon Miller, Pottermore CEO Charlie Redmayne; Martha Stewart COO Lisa Gersh; WordPress creator Matt Mullenweg; new USA Today Publisher Larry Kramer; and Condé Nast’s Bob Sauerberg. We’ll talk about making video pay, true cross-platform publishing, discoverability and much more.

Can’t make it in person? Our staff will be writing about it here, you can follow the hashtag #pc2012 — and, even better, you can join us virtually via the livestream of paidContent 2012 here.

Live-blogged stories from the event:

• Content, not hardware, have made tablets the current king
• The new digital newsstand: Enabling “pass-along” — and saying no sometimes
• Digital story-telling and the rise of the new publishers
• Fred Wilson: Content owners, don’t fear the future
• New ‘radically simplified’ WordPress is on the way
• HTML5 is a newspaper’s best friend – even if it has a mobile app
• Conde Nast’s Sauerberg: Get busy innovating, or get busy dying
• Don’t think of it as content, think of it as information
• For discoverability, traditional tools still dominate
• Does social beat search, or does “peacocking” get in the way?
• Financial Times exec: iOS apps don’t work for publishers
• Jon Miller: Hulu still essential to broadcasters
• Social media doesn’t speed up the news cycle — it kills it
• Richard Russo: Amazon puts great young writers in “particular peril”
• Is a vast video library worth the time and money?
• Harry Potter’s publishing wand can tame Amazon, pirates

• On Friday, Facebook is set to flip the switch from years of hyped speculation to the reality of a mega-hyped IPO. It’s waiting for regulatory approval to spend $1 billion on Instagram. As I write this, the news is breaking that Pinterest is about raise a round that will follow it at $1.5 billion. A quick scan of our own news pages shows hundreds of millions being invested in the digital content ecosystem — often with a firm belief that there is revenue somewhere to justify those investments, but without any real sense of where it will come from. We’ll ask John Borthwick and Fred Wilson, among others, where they are investing and why.
• Cable and broadcast networks have been unveiling new programming slates into a more fragmented video universe than ever before. Discovery Communications bought Revision 3 for $30 million, Turner Broadcasting invested in Funny or Die. At the same time, YouTube’s $100 million investment in original programming is rolling out channel by channel, AOL is finally moving ahead with its major video plans, Yahoo is investing in original programs with Tom Hanks, Katie Couric and others — and so are Hulu, Amazon and Netflix. Brian Bedol, who is trying to replicate his success as a cable network founder with YouTube channels and other efforts; Lisa Gersh, president and COO of Martha Stewart Living Omnimedia, and Rob Burnett, CEO of David Letterman’s Worldwide Pants, will take us inside their thinking as they make their way through The Video Boom.
• Just this week, one of our moderators turned from board member and adjunct professor to active exec again. That means Larry Kramer will be sitting down as president and publisher of USA Today with John Paton and Jim Bankoff to talk about what it takes to lead and innovate, to be a “new publisher.” Since paidContent 2011, Bankoff taken SB Nation, a network of sports sites, to Vox Media and added a tech vertical with The Verge and has a gaming vertical on the way. Paton, meanwhile, has added MediaNews to his Journal Register portfolio, and is now the the CEO of the much-larger DigitalFirst.

As much as things change, one goal remains the same: the creation and evolution of sustainable business models that will support quality media, entertainment and information across platforms.

We’ll be covering the topics that matter to you in our signature one-day, single-stage, 360-degree style. We have a stellar roster of speakers and moderators who are more than up for the task, including:

• Jon Miller, Chief Digital Officer, News Corp.
• Bob Sauerberg, President, Condé Nast
• Vivian Schiller, Chief Digital Officer, NBC News
• Josh Marshall, Editor & Publisher, TalkingPointsMemo.com
• Mark Johnson, CEO, Zite
• Matt Mullenweg, Founding Developer, WordPress and Founder, Automattic

The full list of confirmed speakers is here.

Just as important as the speakers, though, is the fact that we have great attendees with a lot to add to the discussion.

But space is limited and tickets are selling fast — so if you want to take full advantage of this jam-packed agenda and the opportunities that come with networking throughout the day from breakfast to closing cocktails, I strongly suggest you register now.

If you’re interested in sponsoring paidContent 2012, please contact eventsales@gigaom.com.

Everything will be on the table: finding the right way to take an icon like Harry Potter digital without selling out; getting free from DRM and still getting paid; shifting to digital first without losing traditional values; creating appointment broadband viewing; mixing technology with insight to heighten discoverability; the rebirth of the browser; digital subscription strategies and more.

It’s a lot of ground to cover for a one-day, single-stage event. Luckily, we have a stellar roster of speakers and moderators who are more than up for the task, including:

• Lisa Gersh, president of Martha Stewart Living Omnimedia
• John Borthwick, Founder & CEO, betaworks
• Jon Miller, Chief Digital Officer, News Corp.
• Fred Wilson, Managing Partner, Union Square Ventures
• Amy Banse, Managing Director & Head of Funds, Comcast Ventures
• Anil Dash, Co-Founder & Managing Director, Activate

  The full list of confirmed speakers is here.

  Just as important as the speakers, though, is the fact that we have great attendees with a lot to add to the discussion.

  But space is limited. This isn’t a ballroom where we can squeeze in a few more chairs at the last minute — so if you want to take full advantage of this jam-packed agenda and the opportunities that come with networking throughout the day from breakfast to closing cocktails, I strongly suggest you register now.

  If you’re interested in sponsoring paidContent 2012, please contact eventsales@gigaom.com.

  

Sure, newspaper revenues are tanking and layoffs are happening. And there’s no doubt that there is pain and chaos everywhere else in the industry. Radio, television and magazines — all are facing trying times. But as people say, amidst chaos lies opportunity. Over the past few years, we’ve seen mobile devices like smartphones and tablets explode and the emergence of e-paper, astonishing new screens, global distribution platforms, new payment systems such as Amazon and Apple’s stores, and social amplifiers like Facebook and Twitter. We are in the forest after a downpour, and we are ready for new ideas to mushroom.

I admit there are more questions than answers at this point, but these questions are the raw material we can use to write a better script for tomorrow’s content business. These threats and, more importantly, opportunities will be part of the discourse at paidContent 2012, which will be held on May 23, 2012, at the TimesCenter in New York City.

Fred Wilson, Union Square Ventures

In conversations with industry leaders such as Bob Saureberg of Conde Nast, Fred Wilson of Union Square Ventures (an investor in revolutionary companies such as Kickstarter and Twitter) and Amy Banse of Comcast, conference chair and paidContent editor Staci Kramer — along with GigaOM senior writer Mathew Ingram — will ponder the future of the business. No surprise, Staci has labeled this conference: At the crossroads. Here is the schedule. (Click here to register.)

Other speakers at the event include Vivian Schiller of NBC News, Lisa Gersh of Martha Stewart Living Omnimedia, Jon Miller of News Corp., John Borthwick of Betaworks, Matt Mullenweg of WordPress/Automattic and Anil Dash of Expert Labs. Read the full list of speakers here.

I am looking forward to this event and figuring out the future of the industry I love so much.

In addition to the merchandise revenues, J.C. Penney also will make advertising commitments. The investment gives it a stake in the company’s success across the board.

The deal, which gives MSLO a cash infusion, should put to rest the notions of an outright sale raised when MSLO brought in Blackstone Advisory Partners in June “to review and respond to various parties that have expressed interest in potentially partnering with or investing in the Company, as well as exploring other opportunities.” Wednesday’s announcement marked the end of Blackstone’s role with the company.

Blackstone was part of a sweeping series of moves announced at the same time, include the hiring of Oxygen alum Lisa Gersh as president and COO with the goal of making her CEO by early 2013. Coincidentally, June is also when Ron Johnson left as the head of Apple’s phenomenally successful retail operations to take the helm as CEO of J.C. Penney.

Martha Stewart also rejoined the board of directors of the company she founded. The two women appeared together Wednesday at the annual UBS media conference, where they stood out because of the buzz around the deal — and because companies led by women are still an exception. The session was scheduled for Tuesday but was postponed at the company’s request for what turned out to be good reason. (Much better news for MSLO than for THQ; (NSDQ: THQI) the gaming company canceled, then announced a 25 percent cut in its net sale estimates for the quarter.)

The J.C. Penney announcement comes as Gersh finished her first six months. The next six and beyond will be about making it pay off, along with the company’s other major retail partnerships, while continuing to push the publishing and broadcasting segments to perform to capability. Despite numerous iterations, reorgs and personnel changes, MSLO has yet to find a way to turn up the flames on all burners at the same time. A healthy cross platform matters not only for revenues but for the ultimate success of merchandising, which relies on the personal brand of Martha Stewart and MSLO’s reach across its sites, apps, magazines, TV shows and radio.

Analog and digital: The agreement with J.C. Penney is both analog and digital, calling for Martha Stewart retail stores in the majority of jcpenney department stores and a jointly developed new e-commerce site planned to launch in 2013. Each includes a focus on “how to” advice in addition to selling merchandise.

This is where Johnson’s background at Apple (NSDQ: AAPL), where he opened more than 300 stores over a decade, and previously at Target, where he launched the Michael Graves line that helped give the discount chain a sophisticated veneer, comes into play. Johnson understands how to blend retail and e-tail. As important, he knows what’s it’s like to work with an iconic perfectionist.

He also gets the human component of sales. As Apple retail chief, Johnson suggested a way to bridge the concierge experience a guest might expect at the Ritz-Carlton with in-store customer service. His suggestion was the Genius staffed with the “smartest Mac people.” In his bio Steve Jobs, Walter Isaacson says the Apple co-founder called the idea crazy: “You can’t call them geniuses. They’re geeks. They don’t have the people skills to deliver on something called the genius bar.” The next day Johnson heard Jobs ordered up a trademark on the name. As anyone who has been to an Apple store can tell you, the Genius Bar is the hub. Jobs was right about the geek component — not every geek is cut out to help people — but he was also wrong — a lot of geeks are great at it.

The idea for Martha Stewart is to help people use the merchandise in ways that work for them, just as the Genius Bar helps people learn to use new shiny objects to show off family pictures, make movies or do schoolwork. We can’t all be Martha Stewart and buying a Martha Stewart plate doesn’t mean you know how to set a festive table. They promise trained staffers for each retail outlet with lifestyle expertise.

Done right, it should boost the publishing and broadcasting segments as well.

In a brief interview Wednesday as she left UBS, Stewart told me they have yet to settle on a name for the service. (Note trademark mention above for one reason why it won’t be a Genius Bar.) But the way she spoke of Johnson suggested a comfort level working with him that could bode well.

Stewart also was careful not to leave other retailers out of the conversation — Macy’s, Home Depot and Staples (the Martha Stewart office collection) — but given Johnson’s aspirations and the chains head-to-head competition in malls, it’s easy to see why Macy’s might not be keen. Indeed, according to the WSJ, the department store chain that has had an exclusive line since 2007, said Wednesday that it is reviewing potential changes. The paper also reported that Macy’s was told about the new pact the night before it was announced. The five-year deal with Macy’s expires at the end of 2012 with a renewal option; if that isn’t picked up it would be a blow for MSLO and its investors, including J.C. Penney. MSLO promises the lines will be different. Will that be enough — and will Macy’s really want to feature Martha Stewart as prominently as it has in marketing?

Having spent considerable time in various Macy’s Martha Stewart spaces, I can safely say the chain hasn’t come close to creating the kind of experience Johnson envisions. The collections blend in to various departments instead of truly standing out and despite the engaging ad campaign that highlights Stewart’s contributions and some in-store events, it rarely feels connected to other elements of the MSLO empire. And I’ve never had the sense anyone wants to show me how to use a bundt cake pan.

All about the execution: We’ve all seen deals that sound great go sour and promises that look good on paper fail to deliver. They have about 18 months to set the foundations to really make this work. Johnson knows what it takes to create a great retail experience for electronics in today’s environment. That has to translate in a consumer world that’s far more tech savvy and comfortable with mobile and e-commerce but inside a mid-range department store chain. You aren’t going to see stone floors from Italy and floating staircases in these stores. J.C. Penney also will have to deal with the same issue of anyone basing a strategy on a key figure: it has to be able to work without Martha Stewart, too. Johnson knows this all too well but while Apple and Steve Jobs were synonymous, he was not “the” brand.

Boost for the stock: The stock popped in June on expectations that Blackstone would deliver. It popped again Wednesday on the deal news and word of a special dividend for shareholders on record as of Dec. 19, rising more than a dollar to close 33 percent higher at $4.16 although it didn’t get back to the June high of $5.49.