Playboy Makes A Comeback

It looks like Playboy magazine is gaining readers again. Hmmmmm, must be because the quality of the articles has gone up.

A makeover to appeal to younger readers and a foray into New Media have helped the bunny hop into the black. Under new editor James Kaminsky, Playboy Enterprise's flagship magazine received a much-needed facelift to fight intense competition for readers and relevance in a post-Maxim publishing world. Readers number more than 3 million — more than either Newsweek, Vanity Fair, or BusinessWeek, for that matter — but that's less than half the readership Playboy enjoyed during its heyday in the 1970s.

What's driving profits for the middle-aged company now are pay-TV and the Internet. In 2002, Playboy Enterprises derived 55% of its revenue from the entertainment and online divisions, vs. 40% from publishing. (The other 5% will come largely from licensing.) Analysts expect the trend to continue. Harris Nesbitt Gerard analyst Jeffrey Hoskins pegs 2004 revenue streams for the entertainment, online, and publishing segments at 44%, 13%, and 37%, respectively, with licensing at around 6%. Indeed, while patriarch Hugh has spent his time hitting the cocktail circuit with his seven buxom girlfriends, daughter and CEO Christie Hefner has quietly built Playboy Enterprises into one of the few successful examples of media synergy (see BW Online, 5/24/02, "Playboy's Synergizer Bunny?").

I think the key for a company like this is to show that they are more than just a sex magazine. If Playboy can walk that line that borders on respectability, they will succeed where as others have failed.