End of Days for Playboy?
Here’s two news items regarding Playboy Enterprises. The first is a snippet from SmartMoney.com published about 5 months ago. The second is in today’s news.
Are we witnessing the “End of Days” for Hefner’s once-mighty brand?
From SmartMoney.com, May, 2006:
Playboy hasn’t signed a new pact with DirecTV, (CEO Christie) Hefner said, leaving unclear whether it would lose more channel spots to other adult-content providers. Privately owned competitors Hustler Magazine and Penthouse Television are gearing up to enter the video-on-demand cable market, with Penthouse TV slated for a June launch.
“Playboy could lose another channel or two,” says Dennis McAlpine, president of independent research firm McAlpine Associates in Scarsdale, N.Y. “They had five. The good news is that it’s too early to tell — they don’t know how badly it’s hurt them. It’s not just DirecTV. The other stuff is going to hell, too. The magazine is a dreadful performer.”
Lower advertising and newsstand sales for its flagship magazine caused a 13% decline in quarterly publishing revenues to $23.5 million. Playboy expects to report a 16% decline in ad revenues year-over-year for the second quarter.
From today’s news, as reported by Yahoo Finance:
NEW FRONTIER MEDIA: VICTORY OVER PLAYBOY
“Playboy has shut down all of its adult movie brands,” says New Frontier
–PR Newswire
BOULDER, Colo., New Frontier Media, Inc. (Nasdaq: NOOF - News), a worldwide producer and distributor of general and adult- themed motion picture entertainment, today announced the start of a day-long celebration honoring the Company’s victory over Playboy Enterprises, Inc. (NYSE:PLA - News). Earlier this month, Playboy announced the cancellation of nine of its adult pay-per-view networks.
“We’ve consulted industry experts and believe that this is the most extensive network shake-up in the history of the multi-channel business,” said Ken Boenish, President of New Frontier Media, Inc. “Playboy has shut down all of its adult movie brands, replaced them with complete startup services, and expects cable and satellite operators to simply go along. We think this is a great opportunity for distributors to reconsider their adult strategy and switch to networks with proven performance.”
Since the launch of its first network in 1998, New Frontier Media services have replaced Playboy services in more than 60 million network households. No Playboy service has ever replaced a New Frontier Media service in a U.S. cable household.
In documents released to affiliates earlier this month, Playboy announced the discontinuance of the following network brands effective November 1, 2006: Spice, Spice 2, Spice Hot, Spice Live, Spice Platinum, Hot Zone, Hot Network, Hot Net Plus, and Playboy TV Classic. Playboy’s Taste of Spice and Spice HD were cancelled earlier this year.
New Frontier Media’s subsidiary, The Erotic Networks, has grown from a standing start in 1998 to over 126 million network households today. The Company’s careful focus on operator requirements has made it a consistent performance leader.
“We believe we approach the adult business from a smarter perspective,” said Mr. Boenish. “Today, we feel that even our competitor has acknowledged this point.”
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