Playboy Into the Red

[gonzo]

Playboy Enterprises Inc. on Tuesday reported a loss of nearly $9 million for the second quarter because of a restructuring charge largely related to the closure of its New York office.


Excluding the charge, the Chicago adult-entertainment company posted a small profit as its aggressive cost-cutting efforts offset revenue declines in its television, licensing and publishing units.


The loss of $8.7 million, or 26 cents per share, compares with a loss of $3.2 million, or 10 cents per share, in the second quarter last year. Total revenue for the quarter declined 15% to $62.2 million.


The results are the first under Chief Executive Scott Flanders, the former CEO of Freedom Communications who was hired after Christie Hefner resigned late last year. Mr. Flanders inherited a company whose diminishing share of the market for adult entertainment has increased the possibility that it will change hands after more than a half-century under founder Hugh Hefner's control. The company in February indicated it was "willing to listen" to offers. Since then, a number of private-equity firms have explored a possible acquisition.


In a conference call Tuesday, Mr. Flanders declined to comment on the possibility of a sale, saying only that the company has a "fiduciary responsibility" to consider all offers. He said his focus is on continuing to cut costs and returning the company's various business segments to growth.
For years, growth in the entertainment and licensing divisions helped offset the namesake magazine's diminishing stature in publishing. In recent quarters, though, those segments also have taken a hit, increasing the pressure on the company to cut costs.


Revenue in the entertainment division, which includes Playboy TV, fell nearly 20% to $23.8 million for the quarter, as the popularity of video-on-demand continues to erode Playboy's market share. Licensing revenue fell 22% to $4.8 million, although company executives said they expect licensing growth in the second half due to expansion into new categories, like body sprays and "nutriceuticals," and new territories, such as India.
Publishing is a steeper climb. The company's namesake magazine posted income gains in the second quarter, but that was largely because of the decision to combine the July and August issues. Playboy expects to report a 47% decline in ad pages in the third quarter, when it will publish one fewer issue.


Company executives have said they intend to cut the magazine's rate base, the number of copies it guarantees advertisers it will deliver. The monthly has been hit hard by the proliferation of magazines aimed at young men.


Mr. Flanders said he still believes the property can be viable. "I'm not convinced the magazine has to be a money loser," he said.


http://online.wsj.com/article/SB124940820658805297.html

[RawAlex]

"The monthly has been hit hard by the proliferation of magazines aimed at young men."

This is especially important when your brand tends to come off as aimed at old men.

Hint for Playboy: If you want to fight for younger readers, you might consider a new title for that. Making this old dog do a new trick ain't easy

[Evil Chris]

It's perfectly acceptable to pull out a copy of "Maxim" on an airplane or bus while travelling, but not so much Playboy. In fact, not at all.

[gonzo]

Originally Posted by Evil Chris

It's perfectly acceptable to pull out a copy of "Maxim" on an airplane or bus while travelling, but not so much Playboy. In fact, not at all.

Chris has a point!

[Hell Puppy]

Originally Posted by Evil Chris

It's perfectly acceptable to pull out a copy of "Maxim" on an airplane or bus while travelling, but not so much Playboy. In fact, not at all.

....i'll surf up whatever i want to read or watch on my phone or ipod instead.

there's a lesson in there that playboy still hasn't figured out.

[softball]

Originally Posted by gonzo

Chris has a point!

I strongly disagree. I have seen Playboy being read on airplanes and airports tons of times. I think this is a demographic issue.

[gonzo]

Originally Posted by rhetorical

I strongly disagree. I have seen Playboy being read on airplanes and airports tons of times. I think this is a demographic issue.

Remember Im down South brother. We shot Larry Flynt!

[Evil Chris]

Originally Posted by Hell Puppy

....i'll surf up whatever i want to read or watch on my phone or ipod instead.

there's a lesson in there that playboy still hasn't figured out.

That's true too.

But will paper or magazine reading in public places ever really go away?
I don't think they will, ever.

Even now, each time I fly anywhere I always pick up a copy of McLeans and Time to read on the plane. Sometimes a copy of the hockey news too.

[Cleo]

I've always been an avid reader but rarely buy magazines anymore due to the internet.

One exception is New Scientist. You can read part of their articles for free and have the option to subscribe to their website to read the full articles and a printed subscription also comes with full website access. This model seems to work well enough to get me to subscribe to the printed version but even then I often prefer to read it online.

[RawAlex]

Originally Posted by Evil Chris

That's true too.

But will paper or magazine reading in public places ever really go away?
I don't think they will, ever.

Even now, each time I fly anywhere I always pick up a copy of McLeans and Time to read on the plane. Sometimes a copy of the hockey news too.

It's very hard. Kindle is as close as anyone has gotten so far, but 10 minutes of looking at that thing gives me a headache. Plus you wouldn't want to take it to read in the bathtub, hot tub, or wherever you might be.

Good old fashioned paper is still remarkably effecient, cheap, easily transported, etc.

[Cleo]

The iPhone has all but killed reading magazines in the shitter for me.

[Hell Puppy]

Originally Posted by Evil Chris

That's true too.

But will paper or magazine reading in public places ever really go away?
I don't think they will, ever.

Even now, each time I fly anywhere I always pick up a copy of McLeans and Time to read on the plane. Sometimes a copy of the hockey news too.

Watching my own habits, I still tend to grab a couple of magazines for the plane ride out of habit, but 9 times out of 10 over the last year they've stayed in my backpack unread til I get home.

I usually amuse myself with a collection of movies and TV shows on the Ipod Touch.

As Wifi gets on more aircraft, I see no reason to bother with the magazines at all.

[Evil Chris]

Well, look at it this way. Could reading the newspaper be considered a "fad" at all? I don't think so. Could this be said about portable (disposable) devices? Maybe.

iPhones, iPods, etc... will eventually be in the garbage due to other (better?) devices but the daily newspaper and magazine will live on. Just my own 2 cents.

[EmporerEJ]

The problem is not the content, it's monetizing the medium.
The old "newspaper" model doesn't seem to translate well to electronic content.
It's not because the model's bad, it's because people don't value the Internet "ads" the same way they do print ads.
(Which really is stupid)

[softball]

Interestingly enough, newspapers are portable (disposable) devices. What newspapers do is curate your information and not everyone wants to spend all day doing that to remain ultra current.

[softball]

Originally Posted by EmporerEJ

The problem is not the content, it's monetizing the medium.
The old "newspaper" model doesn't seem to translate well to electronic content.
It's not because the model's bad, it's because people don't value the Internet "ads" the same way they do print ads.
(Which really is stupid)

Personally, I skip right over internet ads. I have a huge blind spot there as do many others, I suspect.

[EmporerEJ]

Originally Posted by rhetorical

Personally, I skip right over internet ads. I have a huge blind spot there as do many others, I suspect.

When was the last time you actually "read" a newspaper ad?
Like a web ad, unless it catches your eye, people "skip" right over them.

Same thing. Advertising people just can "sell the sizzle" of the new medium yet. And newspaper editors seem to see the net as either an "expense," or some way to charge people for reading what is essentially a "free" medium for the consumer. Your 50 cent cover price on the paper has always been a "delivery" cost, and a way to qualify the subscriber as a serious reader. Because if he wasn't a serious reader, why would he pay a subscription?

There is no parallel, or standardized accepted model for the web component.....yet.

[softball]

Originally Posted by EmporerEJ

When was the last time you actually "read" a newspaper ad?
Like a web ad, unless it catches your eye, people "skip" right over them.

Same thing. Advertising people just can "sell the sizzle" of the new medium yet. And newspaper editors seem to see the net as either an "expense," or some way to charge people for reading what is essentially a "free" medium for the consumer. Your 50 cent cover price on the paper has always been a "delivery" cost, and a way to qualify the subscriber as a serious reader. Because if he wasn't a serious reader, why would he pay a subscription?

There is no parallel, or standardized accepted model for the web component.....yet.

I actually do read newspaper ads. Coincidentally, I just got in from breakfast at the local greasy spoon and it was busy with people reading current and day old newspapers The ads are being read in newspapers, but I question if they are on the net. They also stay open on tables and people glance down at them and they have a certain recyclyabele shelf life.

[DannyCox]

I subscribe to 3 different sailing and boating magazines. All 3 now offer the full version on-line, but I just cannot sit at a PC and read for pleasure. I need to sit back and relax for that. The magazines are my "bathroom reading material" with books still being my main pastime. Carol and I spend an easy $100.00 a month on paperbacks as we both are avid readers. I read a couple of books a week and really can't see doing it with an electronic device.

I also get 2 newspapers delivered, a local daily and a national daily, and read them both every morning. There is just something about starting your day at the kitchen table, with coffee, smokes and a newspaper!