Playboy Pours Millions Into Online Infrastructure

LOS ANGELES — Just days after Playboy announced it had hired former Turner Broadcasting executive James Glasscock as the new vice president of video-on-demand for the company, recent financial disclosures reveal Playboy has plunked roughly $12 million into “online distribution” in the third quarter.

More specifically, the money was spent in September on online distribution business ICS, owner of adult.com and the popular webmaster message board gofuckyourself.com. As previously reported by XBiz, Playboy said it expected the ICS buy to create the opportunity to promote its websites to a broader audience via affiliate networks operated by ICS, and to roll out new products, sites and distribution outlets.

“The acquisition was part of [our] strategy to expand online revenues through bolt-on acquisitions in that space,” said Jay Jay Nesheim, vice president of public relations at Playboy. ‘We acquired an affiliate program infrastructure that will give us the opportunity to expand our traffic reach across all of our properties, including the subscription clubs, online store and new digital Playboy magazine.”

Nesheim said the company also was looking to repurchase all outstanding equity in Playboy.com, referencing moves earlier in November when Playboy bought back nearly $7 million in stock from editor-in-chief Hugh Hefner, giving the company 97 percent ownership of outstanding equity.

About $5 million of the websites preferred stock remains to be bought back by the corporate entity, Nesheim said.

According to filings, Playboy magazine is down several million dollars in net revenue for the nine months ending Sept. 30. Revenues this year were $67.5 million compared to $74.8 million during the same period last year.

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