EXHIBIT 99.1

CORPORATE PARTICIPANTS

      JIM FOLLO
      Martha Stewart Living Omnimedia, Inc. - EVP & Chief Financial &
      Administrative Officer

      SHARON PATRICK
      Martha Stewart Living Omnimedia, Inc. - President & CEO

CONFERENCE CALL PARTICIPANTS

      MICHAEL MELTZ
      Bear Stearns - Analyst

      DOUGLAS ARTHUR
      Morgan Stanley - Analyst

      ALISSA GOLDWASSER
      William Blair - Analyst

      STEVE GITTAMO
      Verdis (ph) Capital - Analyst

PRESENTATION

OPERATOR

      Good morning, and welcome to the Martha Stewart Living OmniMedia, Inc.
third quarter 2004 earnings conference call and webcast. All participants will
be placed on a listen-only mode until the question-and-answer session of the
call. At the request of Martha Stewart Living OmniMedia, Inc., the call is being
recorded. Anyone with objections should disconnect at this time. At this time,
it's my pleasure to introduce Mr. James Follo, Executive Vice President and
Chief Financial and Administrative Officer of Martha Stewart Living OmniMedia,
Inc.

      JIM FOLLO - MARTHA STEWART LIVING OMNIMEDIA, INC. - EVP & CHIEF FINANCIAL
      & ADMINISTRATIVE OFFICER

      Thank you. Good afternoon and thank you for attending Martha Stewart
Living OmniMedia's third quarter 2004 earnings teleconference and webcast. Also
with me today is Sharon Patrick, our President and Chief Executive Officer.
Sharon will open today with a strategic and operational overview of the Company,
and I will conclude with a financial review of the third quarter and discuss the
outlook for the fourth quarter of 2004.

Before turning the conference call over to Sharon, I'd like to remind everybody
that our discussion today may include forward-looking statements, which can
generally be identified by the use of terminologies, such as will and expects.
Our actual results may differ materially from those projected in the statements.
Factors that could cause such differences are discussed in our filings with the
Securities and Exchange Commission, particularly in "management's discussion and
analysis" sections of our periodic filings in our earnings release issued this
morning.

An archived version of this teleconference and webcast will be available on the
Company's web site at www.MarthaStewart.com through November 11th.

And finally, this morning's press release reflects the requirements of
Regulation G and other rules affecting the use and disclosure of non-GAAP
financial measures. During this call, we will discuss the measure operating
income or loss before depreciation and amortization. Additional information
relating to the measure operating income before depreciation and amortization is
contained in our press release issued this morning, which is accessible on our
website, MarthaStewart.com under the heading "Investor Relations."

With that completed, I would now like to turn the call over to Sharon Patrick.
Sharon?

      SHARON PATRICK - MARTHA STEWART LIVING OMNIMEDIA, INC. - PRESIDENT & CEO

      Thank you, Jim, and good afternoon everyone. Thank you for joining us
today for our third quarter 2004 earnings conference call. We finished the
quarter with a loss lower than previously forecast, and with a strong debt-free
cash balance of $151 million. We continued to receive strong consumer support in
the quarter for our products. Products that continue to offer our unique blend
of Martha Stewart brand attributes, inspirational how-to information translated
into print, video and retail selections that offer quality, style, usefulness
and affordability.

During the quarter, Martha Stewart made a decision to serve her sentence in
advance of completing her appeals process, allowing MSO to attain closure and to
plan for the future with significantly more certainty. As a result, we've
already begun to plan for Martha's return to the Company beginning with the
recent

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announcement of our agreement with Mark Burnett, under which Mr. Burnett will
advise and consult with the Company regarding various television matters. This
will include developing opportunities to evolve the future of Martha Stewart
Living Daily syndicated television show for distribution in the 2005/2006
season, as well as developing a primetime network television series featuring
Martha Stewart for fall 2005.

As we have consistently maintained throughout the 29 months of uncertainty,
MSO's circumstances and performance will strengthen once Martha Stewart's
personal legal situation resolves and we're finally able to enter the process of
putting the matter fully behind us. As forecast, in the last several weeks since
Martha's action, we are beginning to see renewed interest, not only in the
television arena but also from advertisers. While early in the process, we can
say that we are becoming increasingly optimistic about an advertising recovery,
previously the major area of significant weakness 2002 through 2005.

Moreover, with respect to our newest brands and brand labels, all developed,
acquired, and/or launched during the two years of uncertainty, we can also
report good news. Including "Everyday Food" announced a ratebase increase to
800,000 effective with the January issue. We further expanded our Martha Stewart
Signature furniture collection to much acclaim, shortly after winning the Elle
Deco International Design Award in the furniture category for 2004. And we
acquired Body & Soul Magazine as an anchor for a new category to be pioneered by
MSO Natural Living. In short, as we first announced in 1999, we continue to
evolve our business segments and brand, strategically in steady fashion, from
expert personality to trusted brands and brand label assets with an unwavering
eye towards future growth prospects, as well as long-term profitability. We
believe that, taken together, these many developments continue to demonstrate
the enduring resiliency of our company and the strength of our brand assets.

Now, let's turn to our business segments, beginning with publishing. As noted,
the major pressure on the financial performance of the publishing segment over
the past two years plus has been on advertising revenues in our magazine. As I
previously stated, we are beginning to become increasingly optimistic regarding
a print-based advertising recovery, beginning in the second quarter of 2005 and
building momentum as the year progresses. Closure to the legal situation, first
and foremost, combined with one -- the unflagging loyalty of our now nearly 2
million newsstand readers and subscribers. Two, the potential of our new
television shows. Three, our demonstrated ability as a Company to meet our
consumer needs for affordable, high-quality information and product. And four,
our financial strength are making the brand once again attractive to our
advertisers.

During the third quarter, the first issue of the redesigned Martha Stewart
Living magazine hit the newsstand with the new Martha Stewart Living logo and an
updated design and ad rate campaign. The inside of this book also contains new
columns that further position MSO as the authority and undisputed leader for
original and inspirational how-to for the home. Moreover, although we have no
major direct-mail campaigns to discuss this quarter, I'm pleased to report that
our recent subscriber renewal rates for MSO have been trending up, and a recent
survey of our subscribers indicates several other positives, including -- MSO
subscribers currently have, at 95% favorability, a much more favorable view of
the magazine and brand Martha Stewart than at any other point in many years.
Similarly, MSO subscribers at 89% favorability had a more favorable view of
Martha Stewart, the expert personality, than at any point since August 2002.

With respect to prospects, Martha Stewart and Martha Stewart Living are both at
the highest levels of favorability since August 2002. And finally, both
prospects and consumers continue to say that they buy the magazine for its
Martha Stewart brand attributes. Roughly 50% for its how-to ideas, 30% for its
unique sense of style, and approximately 9% for its association with Martha.

In other developments during the quarter, we acquired Body & Soul magazine and
its companion, Dr. Andrew Weil's self-healing newsletter. Body & Soul provides
MSO with the opportunity to enter, lead and become dominant in the new, yet
complementary, lifestyle market, which we believe will be to the millennium what
domestic arts and living was to the '90s. In short, Body & Soul forms the core
of the new Omni Lifestyle category and brand, Natural Living aimed at our highly
attractive 25 to 54 female demographics, and focus less on the home and more on
individual development. "More on me."

Similar to our flagship brand Martha Stewart Living, the Body & Soul brand is
comprised of seven natural living core content areas, including healthy eating,
exercise and fitness, integrated medicine, mental health, spiritual well-being,
natural home, and stress reduction rejuvenation and anti-aging. We believe the
riches of these core areas, backed up by expert authorities, as represented by
Dr. Andrew Weil, bodes well for the future growth and development of this how-to
brand lifestyle, and provides MSO with another opportunity to pioneer another
new lifestyle category that will not only leverage MSO's media and merchandising
platforms, infrastructure and cross-promotional capabilities, but will also
provide a Next Generation fully integrated business to benefit our consumers and
our long-term bottom line.

Now let's turn to the television business segment. The big news of the quarter
is our September announcement regarding our agreements with Mark Burnett, under
which Mr. Burnett, creator and executive producer of the Survivor, Apprentice,
Contender and other highly creative primetime series that have been credited
with changing the face of television, will advise and consult with the Company
and with Martha Stewart on various opportunities, including the evolution of the
Martha Stewart Living daily syndicated show, and will produce a primetime
series.

Moreover, our MSO TV studio production crew also continues to work on other
existing partnership programs and productions, including the development and
filming on several wedding specials for the Style Network, as well as supporting
new development mental opportunities, including Everyday Food programming.
Specifically, our Everyday Food series will launch in January 2005 on PBS to 60%
of U.S. television households, including such major markets as Los Angeles, New
York, Atlanta, and Boston. PBS is confident, given early responses and
enthusiasm for the show, that distribution will continue to increase over time.

Everyday Food, a half-hour show, features an ensemble cast of five of MSO's most
talented cooks who bring the pages of the Everyday Food magazine to life,
demonstrating easy-to-make recipes along with smart tips and kitchen techniques.
We are greatly looking forward to the launch and to the positive effect we
believe the show will have on the evolution of the Everyday Food brand.

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Retail merchandising is our third business segment, offering several brand
labels tailored to different retail channels. With respect to Martha Stewart
Everyday, our mass-market brand label, Q3 sales at Kmart, decreased 9.7% on a
comp store basis. MSO experienced weakness primarily in soft home, as part of a
planned reset refreshment program, the first step of which is to wind down
existing inventory levels. Offsetting this planned development and wind-down was
strength in our housewares program with candles, home decor and kitchen
organization products selling well. It's important to note that the Q3 sales
decline does not impact our full year financial results, as we are paid based on
annual contractual minimum amounts.

We are also gratified to note that Kmart has recently announced the hiring of a
new CEO, Elwin Lewis, a highly respected brand builder, to guide Kmart's
consumer resurgence at store level. We believe the reaffirmation of the
importance of brands to Kmart's turnaround bodes well for Martha Stewart
Everyday. As importantly, we wish Julian Day all the best in his new assignment
and thank him for his successful efforts on all of our behalf.

Now with respect to the Martha Stewart Signature brand label, due to the
continued success of the furniture line with Bernhardt, we recently announced an
additional expansion of this brand label at the International Home Furnishings
market in High Point, North Carolina. We'll introduce 43 new SKUs, including
additions to each of our three collections, Lily Pond, Skylands and Turkey Hill,
as well as to the range of upholstery options. The new items will be available
to consumers at furniture retailers nationwide in March 2005.

Finally with respect to our Internet direct commerce segment, our plan to
significantly improve the financial performance of this segment is tracking as
expected. Our last catalog for living will be mailed in the fourth quarter, in
advance of the holiday season, and we will fully exit the direct catalog portion
of this segment in early 2005. We will, however, continue to grow our
profitable, albeit still small, direct-to-consumer flower business, Martha's
Flowers. This business continues to benefit from changes we implemented earlier
this year, including better technology and improved pricing and product
assortment.

In addition, we are currently reviewing the content portion of our website and
we expect to make improvements that will allow us to minimize our costs while
creating a useful and productive experience for our users. We also expect that
the site will continue to run off of our existing technology platform, and it
will focus on delivering our expert how-to related lifestyle content, driving
subscriptions to our various lifestyle brand magazines, supporting our
television shows and merchandising programs, and continuing to grow our
direct-to-consumer flower business, while seeking additional commercial
opportunities.

In closing, we are delighted in the face of closure to be looking forward. Our
talented employees, readers, viewers, shoppers, and distribution partners are
still with us, primarily due to the continued appeal to consumers of the
long-standing brand attributes associated with the name Martha Stewart --
impeccably researched and original how-to information and inspiration, driving
the quality, style and affordability of our products. We further continue to
greatly appreciate our existing fully committed advertisers as we focus on those
advertisers that, in the face of closure, are showing renewed interest in our
publication.

So with that, let me turn the call over to Jim Follo, our Chief Financial and
Administrative Officer, who will discuss our third-quarter results and outlook
for the fourth quarter. But not before wishing you all a happy Halloween, a
Martha Stewart holiday tradition. Jim?

      JIM FOLLO - MARTHA STEWART LIVING OMNIMEDIA, INC. - EVP & CHIEF FINANCIAL
& ADMINISTRATIVE OFFICER

      Thank you, Sharon. Let's begin by reviewing the highlights of our
third-quarter performance on a consolidated and segment-by-segment basis before
concluding with an outlook for the fourth quarter 2004.

Overall our company revenues for the third quarter of 2004 were 38.7 million
compared to 51.2 million in the third quarter of 2003. Loss from operations for
the quarter was 16.2 million compared to 6.3 million in the prior year's
quarter. Loss from operations for depreciation and amortization, and
amortization of non-cash stock compensation in the quarter, was 13.5 million
compared to income of 4.3 million in the prior year's quarter. And the net loss
for the 2004 quarter was 15 million, or $0.30 per share compared to 3.9 or $0.08
per share in the 2003 quarter.

We continue to maintain our strong financial position as evidenced by our cash
and short-term investment balance of approximately 151 million at September
30th, and we continue to be debt free. We continue to take a careful look at our
businesses and their cost structure and make adjustments where appropriate. Our
full-time employee headcount at September 30th was 482, including 28 employees
who joined the company in the quarter through the Body & Soul acquisition. We
expect to end the year with headcount at approximately the current level.

During the third quarter of 2004 we changed our accounting policy for
subscription acquisition costs in our publishing segment. The company previously
recognized as expense its estimate of annual subscription acquisition costs
ratably throughout the year. The company will now recognize subscription
acquisition costs in the period in which the acquisition effort takes place.
This change in accounting policy does not impact current or prior full year
results, as the company will continue to expense all subscription acquisition
costs in the year incurred. But it does impact the timing of expense recognition
within quarters. The impact of this change on the 2004 quarter was to reduce
selling and promotion costs and net loss by $1.8 million or approximately $0.04
per share. The change had minimal impact on the 2003 quarter. Additional
information on this matter is included in the table to our press release.

Our third-quarter results are substantially better than our previous guidance,
which was a loss of $0.50 per share for the following reasons -- lower marketing
expenses were due to both timing of promotional programs and lower-than-expected
expense levels. We had lower overall costs throughout our segments,

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including higher-than-expected insurance recoveries in the quarter. We received
a tax refund in excess of prior estimates. And the previously-mentioned change
in accounting for subscription acquisition costs all accounted for the
difference, again, the prior guidance.

Now turning to publishing. Publishing segment revenues for the third quarter
were 22.3 million compared to 29.1 million in the prior year's quarter. The
quarterly performance reflects the results of three issues out Martha Stewart
Living, two issues of "Everyday Food", no issues of Martha Stewart Wedding, and
three special interest publications. In addition, we published two issues of
Body & Soul post the acquisition.

For comparison with the 2003 quarters, we published two additional special
interest publications and two issues of Body & Soul. Publishing revenue in the
quarter reflect the following -- advertising pages in Martha Stewart Living
magazine have decreased approximately 50% in the quarter to 155 pages according
to Min. Advertising rate per page was also low in the quarter, the result of the
rate-based reduction effective with the January 2004 issue, to 1.8 million
copies.

Circulation revenue for Martha Stewart Living magazine decreased during the
quarter due principally to the lower rate base in the period, partially offset
by a higher net revenue per subscription copies sold. Revenue from "Everyday
Food" increased approximately 40% in the quarter due principally to higher
subscription revenues due to increased circulation. And initial revenues from
the Body & Soul acquisition approximated 1.5 million.

On the cost side, overall expenses in the segment were flat in the quarter.
Lower production and distribution costs of Martha Stewart Living magazine due to
lower pages per issue were offset by increased marketing expenditures, increased
production costs for "Everyday Food" due to higher circulation costs, and costs
associated with Body &, Soul as well as the increased frequency for special
interest publications. Operating loss for the quarter for this segment was 5.6
million compared to operating income of 1.3 million in the 2003 quarter. And
OIDA was a loss of 5.4 million in the third quarter compared to income of 1.4
million in the third quarter of 2003.

In television, revenues in the quarter were 2.2 million compared to 6.6 million
in the 2003 quarter. The revenue decrease is primarily due to lower licensing
fees and advertising revenue from the syndicated program. The program does not
currently air in syndication, beginning in mid-September 2004. The lower
revenues also resulted from the expiration of certain licensing agreements.

Cost in the segment for the quarter were 4 million compared to 6.4 million in
the 2003 quarter, as a result of lower production activity related to the
syndicated program. Effective mid-September we are no longer on current
production costs related to the program. We continue to maintain a small
development staff in this segment to continue to develop new programming such as
the Everyday Food and Pet-keeping, as well as to support ongoing programming
arrangements with the Style Network and new initiatives related to our
relationship with Mark Burnett. Operating loss in the quarter was 1.8 million
compared to approximately breakeven in the 2003 quarter.

For the merchandising segment revenues were 8 million compared to 8.9 in the
prior year's quarter. The current quarter reflects royalty revenue from Kmart
based on actual product sales. Overall revenue from Kmart declined about 5% in
the quarter, reflecting lower same-store sales, partially offset by higher
year-over-year royalty rates. The quarter also reflects lower revenues due to
contracts related to our Japanese license partner, and revenue from our
signature programs were essentially flat in the quarter.

Expenses in the quarter were approximately $1 million lower due principally to
lower compensation-related costs. Operating income was 4.8 million in the
quarter compared to 4.6 million, resulting from the lower compensation costs,
partially offset by lower revenues.

Internet direct commerce revenues in the quarter were 6.2 million compared to
6.6 million in the prior year's quarter. The decline in the quarter primarily
reflects lower commerce sales resulting from significantly lower catalog
circulation, partially offset by the strength in our direct to consumer floral
business, Martha's Flowers.com. Loss from operations for the quarter were 2.7
million compared to 2 million in the third quarter of 2003. Loss from operations
before depreciation and amortization in the 2004 quarter was 2.4 million
compared to a loss from operations before depreciation and amortization in the
2003 quarter of 1.7 million.

As announced last quarter we will be exiting the commerce portion of the segment
by the end of 2004, and our last catalog will be mailed in the fourth quarter.
We currently don't expect to take any significant charges related to the
wind-down of the commerce operations. We continue to be on our plan with our
exit strategy and expect to have a small inventory balance on hand at year end,
which will be liquidated through various means in early 2005.

On a go-forward basis the segment will focus on delivering content, driving
magazine orders, and continuing to grow our direct to consumer floral business.
Losses in this segment will decline substantially in 2005 and beyond. The extent
and timing of the decline will depend upon several factors, including our
ability to reduce occupancy and overhead costs previously absorbed by this
segment, and our ability to reduce costs of our technology platform for our
website, as well as our success in growing our flower business and increasing
advertising revenues.

Corporate overhead before depreciation and amortization and non-cash
compensation was 8.8 million in the third quarter of 2004 and 2003. The current
quarter includes 1.2 million of higher compensation related costs, related to
certain retention programs offset by generally lower overall expenses and higher
insurance recoveries.

Amortization of non-cash stock compensation expense was a million for the third
quarter compared to 100,000 for the third quarter 2003. The expense in the 2004
quarter principally relates to the amortization of the value of restricted stock
units granted in connection with a November 2003 stock option exchange program.

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I'd now like to wrap up with a discussion of the outlook for the fourth quarter
of 2004. We are currently forecasting a loss per share of $0.20 on revenues of
55 million. The key factors contributing to the quarterly results within each
segment are as follows. For publishing revenues are expected to approximate 25
million while operating loss is expected to be approximately 12 million.

The quarterly results will reflect the following. Continuing advertising and
circulation trends in Martha Stewart Living magazine, increased loss from
Everyday Food primarily due to increased subscription acquisition efforts, and a
full quarter of operating results of the Body & Soul acquisition. We will
publish two issues in the fourth quarter.

Revenues and operating loss in the quarter will be approximately 2.2 million and
1 million, respectively. Continued spending related to our media campaign and
the magazine publication schedule for the fourth quarter of 2004 will include
three issues of Martha Stewart Living, two issues of Everyday Food, one issue of
Kids, two issues of Weddings, and two issues of Body & Soul.

Television operating loss for the quarter will approximate 2.5 million on
revenues of less than $1 million. Merchandising revenues in the quarter are
expected to be approximately 22 million, reflecting royalties earned on product
sales in the quarter plus approximately $11 million due to a minimum guaranteed
royalty due under our Kmart agreement. And operating income will approximate $70
million.

We expect Internet direct commerce revenues to be about 6 million and operating
loss to approximate 2 million. Corporate expenses will approximate 9 million and
the amortization of non-cash compensation will, again, approximate $1 million.
And finally we expect to finish the year with cash and investments of
approximately $130 million.

This concludes the formal portion of our presentation. I would now like to turn
the call over to the conference call operator for the question-and-answer
portion of this session.

QUESTION AND ANSWER

OPERATOR

      (OPERATOR INSTRUCTIONS). Michael Meltz of Bear Stearns.

      MICHAEL MELTZ - BEAR STEARNS - ANALYST

      I have a couple of questions for you. First off, Sharon, you mentioned at
the outset there -- or you may have inferred there may be some merchandising
deals in the pipeline related to Body & Soul. Is there anything there that you
can discuss that you're working on? Or maybe I heard that wrong? Secondly, can
you isolate Everyday Food revenue and EBITDA loss in the quarter? And can you
tell us on annual basis what you are expecting next year from Everyday Food.

      SHARON PATRICK - MARTHA STEWART LIVING OMNIMEDIA, INC. - PRESIDENT & CEO

      I'll take the first question and Jim will take the second. I didn't
specifically say that there were Body and Soul merchandising programs, but what
I did say is that we really see this as a full Omni brand. Obviously, in
addition to the magazine, we will be looking forward to television and
merchandising opportunities. And while there's nothing specific to discuss, that
step-by-step development is certainly our plan.

      JIM FOLLO - MARTHA STEWART LIVING OMNIMEDIA, INC. - EVP & CHIEF FINANCIAL
& ADMINISTRATIVE OFFICER

      You asked about Everyday Food and forward projections. We plan to be in
the investment mode in 2005 on Everyday Food. Although we think a loss will
begin less as we move towards breakeven, potentially in '06. That will obviously
be dependant upon some recovery in the ad market that Sharon alluded to earlier.
As far as the breakout, I mentioned that our revenues in Everyday Food were up
about 40%. And that the quarterly revenue for Everyday Food is approximately 3.2
million. For the nine months period it's about 11.6, and our full year loss on
that business will probably be somewhere in the neighborhood of 9 to $10
million.

OPERATOR

      Douglas Arthur, Morgan Stanley.

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      DOUGLAS ARTHUR - MORGAN STANLEY - ANALYST

      Couple questions. Sharon, I'm wondering if you can just elaborate on what
specifically is giving your confidence of an ad rebound in second quarter of
'05. Secondly, Jim, the cash position you're expecting for year an would be down
a fair amount from the third quarter. I assume that's before you get the cash
inflow from Kmart in early '05. I'm wondering if you could just elaborate on
that. And third, precisely what were the insurance recoveries all about? And how
much was it?

      JIM FOLLO - MARTHA STEWART LIVING OMNIMEDIA, INC. - EVP & CHIEF FINANCIAL
& ADMINISTRATIVE OFFICER

      I'll handle mine, and I'll turn it over to Sharon. The insurance
recoveries are related to our D&O policy. We regularly incur legal fees related
to certain of the class-action lawsuits. That number approximated $1 million in
the quarter. That was not originally in my estimates.

      You had asked about the cash balance. You are correct, the revenue that we
will report in the fourth quarter related to our merchandising program will
include about $11 million of revenues we'll recognize in the quarter, but not
collect until sometime in February of '05. So the cash, there's a disconnect
between the cash use and the reported results, particularly from that segment.

      SHARON PATRICK - MARTHA STEWART LIVING OMNIMEDIA, INC. - PRESIDENT & CEO

      On the advertising, as you know, we sell significantly forward. So as we
look forward, we are becoming more -- we are increasingly optimistic about the
prospects for the recovery beginning in second quarter of 2005, which is what's
active right now, and then building momentum from there as the year goes on. The
reasons for that are the ones I cited. First and foremost, is the closure on
Martha's situation. And the timetable that is inherent in her beginning to serve
her sentence and being back in March, reporting for work while under home
confinement, but available to us 48 hours a week. We have assurance about all of
that, which is as important to advertisers.

That is also combined with the fact that the television arena is active. That we
have consistently been able to hit the high quality standards that our consumers
are looking for, as reflected in the continued enthusiasm for the product, which
is important to the advertisers. And the fact that we continue to show this
financial strength. While I can't discuss with you specific advertiser
commitments, what I can't say is that we are meeting with advertisers with
increasing frequency. We are discussing the quality of our audiences and our
content, and attributes we have to offer them, which as you know, are well in
tact. And we are filling increasing request for RFP in the 2005 time range. So
that's basically the basis of our remarks.

OPERATOR

      Alissa Goldwasser, William Blair.

      ALISSA GOLDWASSER - WILLIAM BLAIR - ANALYST

      Wondering if you could discuss a little bit more detail the Mark Burnett
prime-time show and what you see as the direct and indirect benefits of that.

      SHARON PATRICK - MARTHA STEWART LIVING OMNIMEDIA, INC. - PRESIDENT & CEO

      Mark will be working with us and with Martha on this prime-time show for
fall 2005. And given the competitive arena and the fact that we're just sort of
starting down the road, there are no specifics to discuss with you. We think the
benefit is that it provides a great comeback platform for Martha and the ability
to really present and remind audiences of the appeal and the great strength of
both Martha and the brand. And we think that that will, in fact, be of not only
interest to advertisers, but really will halo the rest of our businesses. And
that's our hope and our expectation and the motivation for making this
agreement.

      ALISSA GOLDWASSER - WILLIAM BLAIR - ANALYST

      And secondly, in your discussions currently with advertisers about the
publishing business for next year, are you enthusiastic about the ability to get
higher rates? Are you looking for bigger commitments from advertisers that have
stuck with you? Are you looking for new advertisers? Or I guess lastly, are you
looking for advertisers to come back who may have abandoned the publication over
the last year or two?

      JIM FOLLO - MARTHA STEWART LIVING OMNIMEDIA, INC. - EVP & CHIEF FINANCIAL
& ADMINISTRATIVE OFFICER

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      I would say every one of those. We're not looking at one specific area,
but everything on your list we would expect in an ad recovery to be able to
achieve.

      SHARON PATRICK - MARTHA STEWART LIVING OMNIMEDIA, INC. - PRESIDENT & CEO

      Those are all Suzanne Sobel's specific objectives.

OPERATOR

      Steve Gittamo of Verdis Capital.

      STEVE GITTAMO - VERDIS CAPITAL - ANALYST

      First, let me just clarify something. The accounts receivable declined by
24 million second quarter to third quarter. Is that the Kmart payment? Is that
basically what happened?

      JIM FOLLO - MARTHA STEWART LIVING OMNIMEDIA, INC. - EVP & CHIEF FINANCIAL
& ADMINISTRATIVE OFFICER

      I don't think that -- your reference, I think, is to the balance sheet and
the press release. That's the comparison of December to September. I think the
change in the quarter was a much more modest decline. The change that you're
referring to is largely due to the Kmart receivable that's on our books as at
December and gets settled in February. In addition, obviously, as we have seen
some pressure on our ad revenue, a lower part of that number would be obviously
receivable from advertising.

      STEVE GITTAMO - VERDIS CAPITAL - ANALYST

      And you mentioned in the press release about the change in the store
accounts and the decline in sales over at Kmart in general, nothing to do with
Martha Stewart. It shouldn't affect us because of the fixed royalty payment
nature of the contract. How long does that -- when does that change if it does?
It is effective through the end of this year or next year?

      JIM FOLLO - MARTHA STEWART LIVING OMNIMEDIA, INC. - EVP & CHIEF FINANCIAL
& ADMINISTRATIVE OFFICER

      We have an arrangement with Kmart which provides for increasing minimum
guaranteed payments through early '08. And then the minimum guaranteed payments
get adjusted on a different formula for the two subsequent years. So this year
the minimum royalty payment is in the high 40 million range. That number grows
each year through the end of '07 and then goes on to a different formula
thereafter.

      STEVE GITTAMO - VERDIS CAPITAL - ANALYST

      So, some percentage increase in '05, '06, '07 then --

      JIM FOLLO - MARTHA STEWART LIVING OMNIMEDIA, INC. - EVP & CHIEF FINANCIAL
& ADMINISTRATIVE OFFICER

      That is correct.

      STEVE GITTAMO - VERDIS CAPITAL - ANALYST

      You've seen in the press about this -- Charles Koppelman came on the Board
of Directors and he purchased 500 shares of stock from, I guess, the large
holder that sponsored him, I guess VA Partners, and then used a promissory note
to pay for 90% of that. And then it looks like the purchase price on the day the
transaction occurred was roughly 5 to $6 below the market at that time. Has
there been any talk on the Board about how this kind of casts a pall over the
company? Do you guys need to be doing this at this point? Shouldn't you just ask
him to step down? It just seems so unusual, and probably unnecessary? It just
seems like it's getting more press attention than it should. Why wouldn't you
just -- no one is that important to the company here, other than Martha. Why
don't we just have him step down?

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      JIM FOLLO - MARTHA STEWART LIVING OMNIMEDIA, INC. - EVP & CHIEF FINANCIAL
& ADMINISTRATIVE OFFICER

      It's difficult for us to comment on a transaction between Board members
that the company is not a party to. Although I do think the statements that were
made by both parties to the transaction that there was a pre-existing
arrangement at a certain share price, which the transaction was concluded at
sometime later. So, that's as much as I really can say, it is a transaction
between two parties, not related to the company. Although having directors have
an equity position in the company, we think, is positive.

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