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Strong DVD Sales Not Enough for Slumping Playboy

13 Feb, 2007 By: Erik Gruenwedel

Despite a $1 million increase in quarterly DVD sales from the recent acquisition of the adult “Club Jenna” brand, Playboy Enterprises posted fourth quarter (ended Dec. 31) profit of $3.7 million, compared to $4.6 million last year.

Total quarterly DVD sales, which included some ancillary revenue from satellite radio, was $4 million.

Overall revenues were $86.2 million, compared to $91 million last year, which the Chicago-based media company attributed to continued market pressure on Playboy magazine and sagging pay-per-view revenues.

In a conference call with investors, Playboy CEO Christie Hefner said the company would extend the “Club Jenna” brand across multiple platforms, including video-on-demand (VOD) and online.

“The acquisition of CJI [has] allowed us to strengthen our adult product line while providing key marketing expertise within the company,” said Hefner.

She said VOD technology has significantly altered the competitive landscape making it easier for new competitors to enter the market while shifting —not increasing— the means by which consumers acquire content.

Playboy has traditionally generated most of its revenue from pay-per-view domestic TV.

“We will continue to focus on subscription VOD [Playboy TV] domestically as consumers become more comfortable with the technology,” Hefner said.

Playboy's market share for adult content on VOD is half what it once was in pay-per-view on domestic TV.

Separately, Playboy in October will release the first of three DVD box sets featuring complete digital archives (including 93,000 photos) from five decades of Playboy magazine (636 issues).

The first two-disc set from the 1950s and 1960s includes every article, interview, cartoon, centerfold, photo and advertisement, and will retail for $100. The set includes a 200-page companion book featuring magazine timeline, page highlights and bonus photos.

Future sets will be released in 2008.

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