Oh, Playboy (NYSE: PLA)! The news just keeps getting worse. I was checking out the stock quote this morning and saw that the sexy company's shares (by "sexy company" I refer to the fact that Playboy makes its money off naked women, I do not mean to imply that this is an awesome growth situation, as if you needed to be reminded, right?) are down to $1.75. Can that be right? I'm afraid it is. I then had to check the news to see what awful catalyst reared its ugly head this time. I found one that was posted earlier in the week at paidcontent.org. It looks like Playboy is going to be riddled with charges in the third quarter and will be ditching 80 jobs. It'll generate a net loss in Q3. And one final thing: it's getting out of the DVD business.
Say what? Are you kidding? The article also displayed a memo from CEO Christie Hefner. She basically tries to spin the exit from the DVD business as some sort of smart strategic move. Heck, it looks to me more like a move that she had no choice but to make to save money. I understand her thoughts about shifting to digital distribution, but come on, if the company can't make it in the home-video arena, then there's something really, really wrong with the business. The brand's power is being destroyed by all the competitive forces in the adult space. X-rated content is everywhere on the internet, amateurs can start up their own websites pretty easily, and clips can be posted and accessed on YouTube at a moment's notice. These are trying times for Playboy, and the CEO needs to realize that aggressive action must be taken to improve the brand equity of the Bunny.
Trouble is, I'm not sure what exactly can be done, I must admit. If the Playboy brand cannot be leveraged, if it has become meaningless, how can Hefner possibly manage a comeback? She's going to have to drastically alter the style of the flagship magazine, I think, and somehow bring the publication more in line with today's tastes. Perhaps they should stop those ornate, artistic centerfold themes and instead shoot the girls with more of a college-targeted, Maxim/Girls-Gone-Wild-like presentation. Really make those shoots simpler, and save some precious money at the same time. Have more girls per issue than ever before, and make sure they're sexier than ever before. Change the editorial direction of the articles, make them less cerebral and more accessible. I know, it sounds like I'm advocating for lessening the quality of the magazine, but Hefner is going to need to experiment quite a bit if she is to find some sort of formula of success for the magazine. If the flagship Playboy title cannot be resurrected, then the rest of the media company stands no chance. And the stock will go lower still. How unsexy can you get?
Disclosure: I don't own any company mentioned; positions can change at any time. Also, to the CEO: if you ever need my opinion on which centerfolds to select to help increase magazine sales, let me know! I'm ready to head to the Mansion to do my part.
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Reader Comments (Page 1 of 1)
10-18-2008 @ 6:49PM
mark said...
Women have the choice -they get paid ,they get laid....and they know they look good,so they like showing their ta-tas....do not make this all out like its the men taking advantage.These girls just simply ahve chosen to trade away thegod given gifts that they are supposed to save for a husband,in exchange for lots of money and attention.do em all.
10-18-2008 @ 7:57PM
raymond said...
steve you start out whining like some 18 yr. old geek away from home (definately not in the military)attending some religious college. are you afraid the dean might read it ,,or "father"( not dad, like most young men would say). are you afraid someone might realize when you go to the "TOILET" some might guess it is not to do a sit down ,,but the opportunity to build muscle in your wrist and arm .and yes you did mean growth ,,as you sit in there with the door locked ,reading the EDITORIALS,in case if you get caught with your pants down,what's next for you if playboy flounders and sinks??I have an idea for you ,,take your lap top into the crapper ,,pull up an X rated site . you'll think up a good excuse for spending 3minutes in there (for you that's all it will take) or spend your money on penthouse ,but if you get caught ,what excuse can you use,the "articles" ?looks like if you get caught ,the head of religious activities will be calling your elders and parents . (hint) playboy has been dead for 20 years.Go to the gym,work out ,and sneek out of your dorm and go out clubbing,or if that scares you ,buy maxim
10-19-2008 @ 1:02AM
Robert Barr said...
How do you lose money in porn? I mean, if you lose money in porn your just not trying. If you owned a funeral home no one would die!
10-19-2008 @ 2:45AM
DJ2ALL said...
Playboy has been dead for almost 30 years already.
10-19-2008 @ 10:26AM
Holly Bianchi said...
Good, no more TRAMPS! SCUMBAGS, the magazine is sick and disgusting and so are Hugh and Christie Hefner!!!
10-19-2008 @ 11:26AM
D L Prescott said...
As a retailer for the magazine, I find there are three strands that are important to buyers:
1. Celebrities in the nude (at least explicitly topless,internationally famous, and ON the cover)
2. Interviews with a current and name international celebrity.
3. New fiction by a name author.
What's left after that is largely perfunctory repetitive junk (barring the odd interesting article) and I will be unable to shift any copies based on it.
I have to wonder if Playboy's market research ever tells them something similar.
My opinion is, there's still a market for the magazine, but will that still be the case after it has been run into the ground.
10-19-2008 @ 1:30PM
Kent said...
Three things about PE: 1) It catered to the "Baby Boomer" era, a generation that is fastly gone beyond sex magazines; 2) Make hay with their Hollywood connections more stridently by licensing their moniker; and 3) PE's market cap is about $60 million; it could go private so that it can remake itself at great cost without being beholden to shareholders. I'm a baby boomer and at one-time a loyal subscriber. I haven't bought a "Playboy" in the last 10 years or so. There just isn't that connection I had with it anymore. I understand that if their share price goes below $1 at the exchange, it is automatically de-listed so it might be an opportunity for them to screen new opportunities. I really wish them well.