Kicking off the presentation, Playboy CEO Christie Hefner began with a broad outline for what she called the company’s two-pronged plan of attack, which includes leveraging licensing operations and expanding its foray into new digital media.
Hefner said Playboy plans to combine the stand-alone publishing business with new digital media, which includes online, mobile and international TV.
“We’ve seen strong growth in new digital media in the last three quarters,” she said. “The acquisition of Club Jenna has helped us leverage the online, mobile and video-on-demand sectors. We’ve also redesigned Playboy.com to take advantage of new media opportunities.”
Without giving specifics, Hefner alluded to the possibilities of the Club Jenna acquisition, which the company bought for $17.6 million, by saying Playboy was now positioned to take advantage of owning the rights to other “high-end” adult content.
Speaking on the redesign of Playboy.com, recent company hire Bob Meyers, who serves as President of the media division, said the new site is a lifestyle portal, which allows the company to generate revenue in two ways.
“As a lifestyle portal, our print advertisers now see Playboy.com as a forum for the multimedia campaigns,” Meyers said. “The redesign also helps our network of webmasters increase revenue because we can highlight the money-making sections of the site.”
As for the ailing magazine, which posted $800,000 in losses in the last quarterly report, Meyers called it the foundation of the brand, stressing that readership statistics looked promising.
“We have more than 10 million readers,” he said. “We’ve also seen a 25 percent increase among college readers, while magazines such as Maxim have declined in that demographic group.”
Hefner wasn’t as optimistic regarding the magazine when she offered her predictions for 2007, saying the company could only expect results on par with 2006 given the “challenging publication market.”
As for the company’s licensing efforts, Playboy President of Global Licensing Alex Vaickus said Playboy products generate $700 million worldwide in retail revenue, which he said was a “good starting place.”
Vaickus said he expects to find new ways to license the Playboy brand, which he called a “high growth, high margin” business.
As for the company’s TV efforts, Hefner said the international TV market offers the most room for growth because it allows Playboy to repurpose its content. The domestic TV market, by contrast, is plagued by high costs attributed to the infrastructure switchover from analog to digital, she said. Building the infrastructure to support VOD, which Meyers called a strong future source of revenue, also has been costly, according to Hefner.
When asked about the recent success of Boulder, Colo.-based adult content distributor New Frontier Media, which posted strong results last month based on inroads made into the satellite market that was once dominated by Playboy, Hefner offered a backhanded compliment.
“New Frontier will continue to do a good job at being a major player in what is a limited business — domestic TV,” Hefner said.
In October, New Frontier claimed victory over Playboy, calling itself the top adult pay-per-view operator.
