CEO Marc H. Bell said the company will try to present consumers with an alternative to the Spice network with “different types of movies … at a competitive price.”
According to a private placement notice filed with the U.S. Securities and Exchange Commission, the company raised $15 million in preferred stock and $33 million in bonds. It will use $26.2 million to repay debt and devote $11.5 million to the new networks.
The announcement is the latest and most ambitious move by Bell since he bought the company out of bankruptcy protection in 2004 from former owner Gneral Media Inc.
Bell said that he believes the company can expand the market for adult PPV programming and attract new customers through strategic marketing initiatives.
"One of Penthouse's strategic advantages is our unique ability to drive traffic to our broadcast properties from our magazines, web sites, clubs and wireless mediums," Bell said.
As part of its bid to wrestle market share away from its competitors, Penthouse has hired Jim English, a former president of Playboy TV Networks Worldwide.
“We trust Jim's creative vision, and we are confident in his network broadcasting abilities,” Bell said. “Jim's knowledge and experience will give us a leg-up globally.”
In addition to PPV subscription channels, Penthouse also will distribute branded content via digital video-on-demand over cable and satellite services throughout North America, all of which will be presented exclusively in high definition.
"This is a very exciting time," English said of the new venture, "and yet another opportunity to do what I do best — join content and emerging technologies. The Penthouse brand is known everywhere in the world and now, with new ownership, management and funding, Penthouse will bring a much-needed shot in the arm to cable and satellite and will set the stage in new arenas such as wireless."
Penthouse anticipates its branded products will be available in the next several years to 100 percent of the U.S. market as well as internationally. The company plans launches in Latin America, Europe and Asia once it gains a foothold domestically.
