Susan Lyne: Building the Brand

Jun 6, 2005  •  Post A Comment

About two weeks before ABC’s upfront for advertisers last month in New York, one of the architects behind several of the network’s hits was busy with a different presentation for TV advertisers. Susan Lyne, who had been president of ABC Entertainment, where she championed “Lost,” “Grey’s Anatomy” and other shows, was participating in the first upfront put on by Martha Stewart Living Omnimedia, primarily to talk about the upcoming syndie show “Martha.”

Ms. Lyne, who became president and CEO of Omnimedia in November 2004, is extremely diplomatic when talking about her tenure at ABC, which ended abruptly in April 2004. “I still think of it as my network,” she said in her midtown Manhattan office. “I will always feel a connection to ABC. I was there during some dark days. And I do love the new shows.”

Now her job is to get Omnimedia back on course after the devastating effects of founder Martha Stewart’s legal troubles. In 2004 Omnimedia’s publishing revenue slumped 21 percent compared with the year before, while revenue from TV plunged almost 82 percent as stations dropped Ms. Stewart’s shows in the wake of her conviction. Revenues were down 13 percent in the first quarter of this year.

Adding uncertainty, what was once about $1.5 billion in merchandising revenue from Kmart has plunged by about a third since the chain went into bankruptcy and Ms. Stewart went to jail. Now Kmart is merging with Sears and it is unclear whether the Martha Stewart brand deal will continue. Ms. Lyne thinks it will, but noted Omnimedia is also looking at selling elsewhere and moving into more upscale markets.

If Omnimedia can make a comeback, the upside is unlimited. However, if the syndicated show and Martha Stewart’s version of “The Apprentice” on NBC are not hits, things could deteriorate quickly. The reality is that the sizzle that sells magazines, merchandising and licensing depends largely on rebuilding the brand on TV.

Ms. Lyne is a believer. “One of the things that impressed me most when I went on the [Omnimedia] board [four months before being named CEO] was just to see the depth of talent here, the fact that so few people had left during a very tough period of time,” she said. “The company was built very smartly. We own all of our assets. We own all the magazines. We own all our television-1,600 hours of television … all evergreen. All segmented. … So all the things that I feel like I need to build this brand and this company are here.”

Ms. Lyne’s background is in publishing as well as TV. She was a journalist before being recruited by ABC in 1996. She was managing editor of the Village Voice from 1978 until 1982 and helped create and launch Premiere magazine in 1987, serving as editor for eight years.

What is new is the challenge of running a public company. Omnimedia’s share price remains depressed. “[Wall Street] is still trying to come up with a way to model this company going forward,” Ms. Lyne said. “There are two separate issues. One, will we be able to get back the old business advertising revenue? The trends are actually excellent now that we are restarting our television business. … The lesser issue is that we have added new businesses. … This is not the same company it was pre-Martha’s legal problems.”

One of Ms. Lyne’s first initiatives was to cash in on the DVD boom. She and key executives flew to Los Angeles and made a presentation “to let the [show business] community see what we actually have in our library,” she recalled. “Every single company bid for us.”

A five-year video distribution deal to release at least 16 titles annually was sealed with Warner Bros. in time to get product out for the last holiday season. Ms. Lyne is also encouraged about a branded furniture line already planned before her arrival, now in about 280 stores. A deal is in the works for a satellite radio channel, as are plans to beef up publishing circulation and ad revenue. But much of it depends on public reaction to Ms. Stewart’s return.

Some have suggested Ms. Stewart is poorly cast for the syndie show, which will include celebrity interviews. But Ms. Lyne said the format and set are designed to capitalize on her strengths: “The idea is that guests-celebrities or other special-interest guests-are going to do something with her. This is not about sitting on a couch asking somebody how it felt to work with Gwyneth Paltrow.”

The NBC series, produced with Mark Burnett (“Survivor,” “Apprentice”), also holds special promise, Ms. Lyne said. “There is a belief that there is a vast audience who either have misperceptions about what [Omnimedia] does, or haven’t felt like our stuff was for them necessarily,” she said. “This is a great opportunity to expose the company and its products to a whole different audience.”

While Mr. Burnett didn’t have the hoped-for success with “The Contender,” and ratings for “The Apprentice” were down last season, Ms. Lyne thinks he is an ideal partner for both the syndie show and the network show. Branded integration deals are already in the works. “While the ‘Apprentice’ numbers may be down, the lead-in numbers are also down dramatically,” said Ms. Lyne, sounding like a former TV exec. “I think they build on 100 percent of their lead-in. So you have to look at those numbers very carefully.”

As for “The Contender,” Ms. Lyne said it is still a “really wonderful show” and very well produced. “Nobody has a track record where everything they put on television is a hit,” she said. “What you hope is that everything you put on is something you can be proud of and some are ultimately hits.”

She said the format of Ms. Stewart’s “Apprentice,” while still involving a weekly competition, will be different from Donald Trump’s version. “[Mr. Burnett] keeps all the pieces that made it successful,” she said, adding that it will still be about business. “This company is not about baking cakes. It’s about selling a billion dollars’ worth of product at Kmart every year. And a massive publishing operation. And a lot of new ancillary businesses.”

Ultimately, isn’t it Martha Stewart’s company? Yes, but Ms. Lyne insisted she is delighted about the founder’s return: “It’s been great having her back. She’s got a better creative eye than anybody I have ever worked with. And she has an understanding of the brand that does influence everything.”