CONSULTING AGREEMENT



     THIS AGREEMENT ("Agreement") is entered into as of October 21, 2005 (the

"Effective Date"), between CAK Entertainment Inc., a New York corporation (the

"Consultant") and Martha Stewart Living Omnimedia, Inc., a Delaware corporation

(the "Company") (each, a "Party").



     WHEREAS, the Consultant is engaged in the music and entertainment business;



     WHEREAS, Charles A. Koppelman, the Chairman and Chief Executive Officer of

the Consultant, currently serves as Chairman of the Board of Directors of the

Company and performs consulting services for the Company, which services shall

cease upon the Effective Date;



     WHEREAS, the Company wishes to engage the Consultant as a consultant to the

Company in order to assist the President and Chief Executive Officer of the

Company in addressing strategic opportunities for the Company including, without

limitation, helping to identify, develop, design, structure and negotiate

merchandising through catalogs, direct marketing, internet commerce, retail

stores, book publishing, magazine, radio and television opportunities, as well

as other product categories now or hereafter developed by the Company

("Opportunities"); and



     WHEREAS, the Consultant wishes to accept such engagement on the terms and

conditions set forth herein;

<PAGE>

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set

forth herein, the Parties agree as follows:



     1. Retention as Consultant. Effective as of the Effective Date, the Company

shall retain the Consultant, and the Consultant shall serve the Company as a



consultant and shall make available to the Company the services of its employee,

Charles A. Koppelman ("Koppelman"), on the terms and conditions set forth

herein.



     2. Term.



          (a) The Consultant shall provide Consulting Services (as defined in

Section 3) hereunder for the period commencing on the Effective Date and ending

on the second anniversary of the Effective Date, unless the period ends earlier

as provided in Section 2(b) (the "Consulting Term"). The Consulting Term shall

automatically be extended for one year unless either Party provides notice to

the other of its intention not to extend the Consulting Term, not less than

ninety (90) day preceding the expiration of the Consulting Term.



          (b) The Consulting Term shall immediately terminate upon the

dissolution or bankruptcy of Consultant, or upon the death or Disability of

Koppelman. For purposes of this Agreement, "Disability" shall have the meaning

set forth in the Company's Amended and Restated 1999 Stock Incentive Plan (the

"Plan").



     3. Non-Exclusive Consulting Services. During the Consulting Term, the

Consultant agrees to render consulting services to the Company by making

Koppelman available to assist the President and Chief Executive Officer of the

Company in identifying and addressing strategic opportunities for the Company

including, without limitation, helping to identify, develop, design, structure

and negotiate Opportunities (the

<PAGE>

"Consulting Services"). The Consultant shall report and be accountable to the

President and Chief Executive Officer orally or in writing, as the President and

Chief Executive Officer may reasonably direct. The Consultant and Koppelman are

entitled to engage in any other business and may enter into other consulting

agreements and provide consulting services to other entities during the

Consulting Term so long as the conduct of such other business or such other

consulting services do not impair the Consulting Services and do not violate

this Agreement. The previous sentence notwithstanding, it is anticipated that

the Consulting Services will require a substantial time commitment on behalf of

the Consultant and Koppelman. Neither Consultant nor Koppelman shall have the

right to execute or enter into agreements or commitments on behalf of the

Company or otherwise exercise any powers of an officer of the Company; provided

that nothing in this Agreement shall be deemed to affect, limit or restrict

Koppelman's rights, obligations, duties and responsibilities as Chairman of the

Board of the Company.



     4. Place of Performance. During the Consulting Term, the Consultant shall

perform its duties hereunder at such locations as it shall deem appropriate and

helpful to the performance of the Consulting Services. The Company shall make

available to the Consultant, during the Consulting Term, an office and the

services of an administrative assistant at the Company's headquarters.

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