Penthouse, Playboy Map Out New Ways to Stay Profitable

NEW YORK — Old-school adult brands are branching out into vanilla markets to make money and attract mainstream traffic and coverage.

One of the brands in question is Penthouse, whose acquisition of social-networking company Various Inc. last December has expanded the company's tent to cover religious couples and caught the interest of Newsweek.com.

But how did Penthouse get religion? By tapping into the faith-based dating market with the site BigChurch.com, one of many social-networking and dating sites that have garnered 250 million total members. This network of dating sites also includes AdultFriendFinder.com, which boasts 18 million members on its own.

Industry analysts pointed to the widespread availability of free adult content online as one of the driving reasons behind the diversification of Penthouse.

"If you're looking for adult content today, there are so many more places and many other ways to do that," said David Miller, managing director at Sanders Morris Harris Group in L.A. "You can get it over the Internet for free."

Penthouse's dalliance with bankruptcy in 2004 also likely contributed to its efforts to branch out.

The venerable Playboy has also been forced to seek out other ways to make money, most of which involve the simple exploitation of its unbeatable brand — the bunny.

"Traditional print is a heritage business for us, and an important part of the brand. But realistically, it's not a business that we see growing," Playboy spokesperson Martha Lindeman said. "Today we are really a brand-management company."

On the Playboy side of the equation, although the company hasn't veered anywhere close to bankruptcy, it posted a $3.1 million loss during the first quarter of this year — and that's despite the company's efforts to lend its brand to casinos, clothing and other products.

But the post “content-is-king” era in the world of media is still young. As companies look for new ways to make money from ventures other than content delivery, the Internet will hopefully make a home for them.

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