Playboy shares fall 20 per cent after profit warning
Hugh Hefner's Playboy empire is floundering in the face of competition from internet sites and video-on-demand television services.
The Playboy brand may still be the most famous name in soft porn, under its instantly recognisable bunny logo, and still advertised by its 80-year-old father in his trademark dressing gown.
But the company has been slow to adapt to the internet age, and its value plunged more than a fifth yesterday after a profit warning.
Editions of Playboy magazine are published in 20 countries, but it has suffered falling sales and advertising revenue as its target male audience searches for similar content online.
And the company admitted yesterday that there has been a precipitous drop in viewers for its cable television channels, including Playboy TV and Spice channels.
The company is currently producing more than 1,500 hours of content every year, but only in the UK, where it expanding its network of channels, is income growing.
Viewers, particularly in the US, have deserted in favour of new video-on-demand channels that allow them to choose their own movies.
Christine Hefner, the daughter of the company's founder and now chairman and chief executive, admitted the company had been too slow to replace the old "linear" programming with new on-demand services.
"The strong performance of the newer digital media businesses of international TV, online and mobile validate not only the appeal of the brand but of our multi-platform business mode," Ms Hefner said. "However, these promising and fast-growing businesses cannot yet offset the negative trends in our larger domestic TV business."
Profit from the entertainment division fell 34 per cent in the first three months of the year, while losses in the publishing division widened from $400,000 to $2.3m. Licensing of the logo and brand to product manufacturers was the one bright spot.
The need to slash costs at the television business would send the group back into the red in the second quarter, it warned.
Hefner recently brought in magazine industry veteran Lou Mohn as the new publisher of Playboy, in a bid to improve sales of the magazine and bolster the Playboy.com website.Reuse content