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.

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Facing declining advertising pages and the need to emphasize “digital, mobile and video platforms” over print, the company said that it will stop selling Everyday Food as a standalone monthly publication. Rather, subscribers to the monthly Martha Stewart Living will receive an Everyday Food “supplement” five times a year, and more of its content will be available online starting next year. MSLO will try to sell Whole Living, but if it can’t find a buyer its content will be folded into Martha Stewart Living.

The New York Times‘ Media Decoder blog reported that 70 MSLO employees, out of about 600, are being laid off: “Employees at Martha Stewart Living have not been able to return to work this week because Hurricane Sandy flooded the basement of their downtown offices. As a result, many of them learned of layoffs by phone and e-mail.”

MSLO expects the combined changes to save $33 to $35 million annually. The company also announced a handful of digital initiatives: a new PBS show, “several exciting new digital video series made for the web” and more apps.

“As a whole, MSLO’s total digital audience has grown an average of 20 to 25 percent year over year every month since January 2012,” president and CEO Lisa Gersh said. “Following a careful evaluation of our media portfolio, we are responding to clear trends we are seeing across the industry to give our consumers what they are telling us they want: more video, more of the inspiration, solutions and expert advice and how-to content our brands offer in digital formats, across more platforms and on a more frequent basis.”

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Your digital craft table in Martha Stewart’s CraftStudio.

How timely: right as we seem to be reopening the debate over whether or not the iPad is a consumption or creation tool, Martha Stewart, the high priestess of crafty creativity, has launched a brand new iPad app called CraftStudio. The app is free until July 8 when it will revert to normal pricing of $4.99, and is available in the App Store starting Thursday.

CraftStudio closely mimics the act of making a card or any other papercraft: sans the actual scissors, construction paper, glue or glitter. Instead, you do your crafting via the iPad’s interface  – tap, swipe, zoom, rotate. For adding glitter, for instance, you trace where you want the glue to go, pick your glitter color and physically shake the iPad. At that point you’ll see the glitter fall down like a snow globe onto your card or project.

The app takes design cues from Apple: it capitalizes heavily on real-life nostalgia. Much like the leather-stitched calendar of Mac OS’s iCal, you click on the vintage film camera in your craft tray and you get the option to import a photo from your iPad or take a new one. Press the round typewriter key and the iPad’s virtual keyboard pops up, along with a font and text alignment picker.

And these creations are made for sharing. CraftStudio is partnered with HP’s Snapfish brand, so you can share your cards via the service or Facebook or Twitter, save it to your device, or print via AirPrint. While it is free for now–until it goes up to $4.99–Stewart wants to upsell you on in-app purchases of themes like “Vacation Adventure” for $1.99. That gets you extra themed stickers, stamps, paper, glitter and customized page edges and corner punches.

I made this with CraftStudio.

Overall, the app is really easy to learn and use.

And here’s the thing: I don’t consider myself the crafty type. I would never pick up a Martha Stewart magazine off the newsstand, even just for browsing. I don’t own any glitter, markers or stamps. But this app, and the card I made in just a few minutes (at right, don’t laugh) was not only fun as an experience — it made me feel like I was actually capable of being moderately artistic.

I think that’s the most important thing with these new digital creativity tools that we’re starting to see for the iPad. They not only appeal to people who are inclined toward craftiness or building, they also open up these activities to people (like me) who would only use an app like this because it’s easier to get started on digital projects. Snapguide has a similar effect — I don’t normally find myself creating DIY how-to guides for other people, but Snapguide’s ease of use makes me want to.

That’s why the idea that the iPad is not a creation tool is really rather silly. There are plenty of apps out there that prove that wrong already — Paper, Brushes, GarageBand, Codea — but now even Martha Stewart is putting her name and her brand on the iPad as a legitimate avenue of creativity.

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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.

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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.

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For tips on classic American cuisine, it’s hard to go wrong with Martha Stewart — especially when she gets Russell Crowe to help out with prepping the bird.

But for a more low-fi approach to your turkey (as well as some incredibly tasty-looking side dishes), here’s Working Class Foodies’ fail-proof Thanksgiving dinner:

Now, for the don’ts: When it comes to the best way to not ruin your family’s Thanksgiving and/or house, one thing is pretty clear: Play it safe; don’t deep fry it. That’s what the below PSA strongly encourages.

This point is made explicitly clear by Tampa Bay’s MJ Morning Show, which did a demonstration of what might happen if you were to deep-fry your turkey in the home.

Whether deep-fried or not, the important thing is that we hope you enjoy whatever you end up eating today — and that you have a happy Thanksgiving.

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The chairman and chief creative officer at Callaway Digital Arts said the best apps on the iPad need to incorporate a mash-up of multimedia content, creating new forms of media, not just ports of existing content. “So much of what has been done to date has been driven by transposing assets from one medium to a digital display,” Callaway said. “That’s not good enough.”

Callaway’s firm Callaway Digital Arts is trying to forge a new kind of app content, what Callaway calls “convergent media publishing.” That may take some getting used to, but it’s promising enough to nab a $6-million Series A investment from Kleiner Perkins’ iFund, with additional funding from Ram Shriram, founder of Sherpalo Ventures,  and Mark Pincus, founder and CEO of Zynga. The New York start-up was spun out earlier this year from multimedia publisher Callaway Arts & Entertainment in order to focus on iOS apps.

Callaway says the first phase of the iOS app revolution was marked by a flood of simple games, but that’s giving way to a second phase of apps that involve more immersive and long-lasting engagement: a banquet versus a snack, he says. By bringing top brands and content to life on tablets and smartphones, Callaway believes it can engage consumers in deeper ways that incorporate the best of audio, animation, video and design, and apps must include more community and sharing features, something Mathew recently noted is missing in many magazine apps. He said successful apps will need to place an even higher priority on design, which should be incorporated right from the start, rather than applied later in the process.

Callaway’s latest product is an interactive cooking app called Martha Stewart Makes Cookies that was released Monday for the iPad. The app functions like a multimedia cookbook, with the text, instructional videos and cookies on display like runway models. Callaway also published the popular Miss Spider’s Tea Party for the iPad, iPhone, and iPod touch; Miss Spider’s Bedtime Story for the iPad; and has future plans for Thomas the Train and Sesame Street-branded titles. Callaway’s apps combine traditional books and interactive entertainment, incorporating games, animation, audio and video. Miss Spider’s Tea Party features a children’s story that includes voice over, video and also puzzles, games and a coloring book.

The company says it’s looking to publish 150 apps a year by the end of 2012. To that end, Callaway Digital Arts is opening an office in San Francisco and plans to almost double its headcount of 22 employees by the end of the year. Callaway said the company is looking for designers who are capable of uniting graphics, design, art direction, user interface and navigation, which he said are essential for this budding publishing platform.

Much of the potential we see in tablets so far has really been in their ability to display existing media in a more personal and convenient way. Books have thrived while magazines are still a work in progress. But if done well, Callaway said, the tablet has a lot more potential to create new publishing products we haven’t really seen before. Now with $6 million in funding, let’s see if Callaway can really help usher in this new phase of apps.

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CBSNews Launching New Web Series; The Tomorrow Show and In Sickness and in Health are two new series, and Washington Unplugged is becoming a daily series. (MediaWeek)

Katalyst Developing I Pledge for TV; show started online and will follow celebs as they do charity work for causes they believe in. (Variety)

Microsoft Messes Up its DTV Transition; Windows Media Center users experience problems as Microsoft didn’t update servers and online component to reflect frequency changes. (The Green Button)

Will Sprint Thwart Sling Media’s 3G Palm Pre App Plans? Sling’s hopes for 3G support on the smart phone could be dashed by Sprint, which is locked into an agreement with MobiTV. (GigaOM)

Tampax Behind Stealthy Viral Video Campaign; Zack16.com features a teenage boy whose “guy parts” have been replaced with “girl parts.” (Ad Age)

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And how can you truly judge a recipe unless you try it on your own? And, by the same logic, how can you truly judge a cooking video unless you try it on your own? I put the cooking web series Average Betty to the test in my own kitchen, and documented the process of making her dinner rolls on camera. Check out the video and Betty’s original recipe at NewTeeVee Station.

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Also, Steve Bryant has some strong words to say about the new series Modelball, “the Skinemaxical tale” of models who play softball — find out what doesn’t work about the comedy series at NewTeeVee Station!

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