As we reported on Friday, Martha Stewart Living Omnimedia cut guidance for Q4 based in part on concerns about softness in the housing market. We noted that this was the first instance we knew of of a media company seeing softness due to housing.
This was technically true, but on the MSO conference call later on Friday, the company provided more detail, attributing the guidance cut directly to a revenue share MSO receives from its deal with KB Homes (houses by Martha Stewart). It also stressed that advertising revenue at Living and its other publications had been strong so far in Q4 (October and November). So our initial concern–that housing was affecting advertising demand–appears to have been unfounded.
MSO is now the only media company we know of that explicitly addressed the tone of its ad business for October and November (presumably to head off concerns like the ones we had). We are still concerned that weakness in housing will spill over into the general ad market, but we haven’t seen compelling evidence that this is happening yet.