Attention all advertising-dependent media companies. (This includes you, NYT, YHOO, GOOG, MCI, VIAB, CBS, TWX, et al). This morning, Martha Stewart Living Omnimedia (MSO) became the first media company that we are aware of to cut revenue and EBITDA guidance based in part on concerns about the housing market.
True, the cut was not massive, and, true, MSO does sell some home furnishings–which could be responsible for most of the concern. But we suspect there’s some advertising conservatism in there, too. So pray hard that this doesn’t become the start of a trend.
*UPDATE: On the conference call later on Friday, the company attributed the guidance cut directly to the KB Homes deal (MSO gets a royalty payment when houses are sold above a certain price threshold). The company also said that advertising in October and the first two days of November was strong. So it appears our initial concern about the guidance cut–that housing weakness was beginning to affect advertising spending–was unfounded.
Martha Stewart: Cuts Guidance on Housing Concerns
Recession Watch: Mortgage Plague Spreads, Stocks Tank
What Happens to GOOG/YHOO in Recessions