Adelphia Communications Corp., willing to absorb a revenue hit in a key market, removed adult networks Spice and Playboy TV from its Los Angeles systems.
The MSO said it might reconsider the move if local franchising authorities mandate reinstatement of the services, but operator executives in the area said that's unlikely.
Adelphia's decision wasn't a surprise to Playboy, because the Coudersport, Pa.-based MSO has dropped adult services after past system acquisitions. However, it was a financial blow at a time when Playboy is making its programming more risqué in order to compete with adult PPV services that offer more explicit fare.
While most of Adelphia's 1.2 million subscribers in the Los Angeles area will lose the Playboy-owned Spice network, Playboy itself will lose PPV access to many Adelphia subscribers, although neither Adelphia nor Playboy will give specific numbers. Combined, Playboy Networks will lose about 7 percent to 8 percent of its addressable base, according to the network.
Adelphia chairman John Rigas said in a statement that the conservative-minded MSO's decision to drop the adult services was in adherence with "the company's long-standing policies."
Those channel slots would be used to provide programming that has "more widespread appeal," he said, but it was unclear which networks would be added.
While acknowledging the appeal of adult-oriented product on "premium services"-probably referring to services like Home Box Office and Showtime-Rigas said "there is not a significant demand for those services devoted solely to adult programming."
Adult programming only represents a "small fraction" of revenue when compared to the premium services, Rigas noted.
But the loss will deliver a blow to Playboy's PPV revenue intake, Playboy Networks Worldwide president Jim English said.
"There's a lot more adult content available in Los Angeles than St. Louis, so it will take its toll," English said.
While Playboy would not provide specific buy-rate numbers from the Los Angeles-area Adelphia-owned systems-which the MSO purchased from Century Communications in 1999-sources said adult PPV is performing well. Those sentiments would coincide with the national success of adult programming.
The PPV adult genre generated around $367 million last year, according to Showtime Event Television. Industry observers estimate that the category could reach the $500 million mark by the end of the year.
Though he would not advocate that subscribers drop cable, English said Adelphia subscribers seeking adult product have several options beyond cable, including the Internet and direct-broadcast satellite services.
"DBS in particular has a very compelling offer and more choice for viewers looking for adult PPV product than cable does," English said.
Adelphia's stand on adult programming has been the topic of several radio talk shows in the area, with locals taking positions on both sides of the issue.
Callers to the radio show
Larry Mantle's Air Talk
on WPCC-FM last week either accused Adelphia of abusing its monopolistic, utility-like power, or praised the company for pursuing morality instead of corporate profits.
"I applaud their courage.they don't have everything I want to see, either. Adelphia can't satisfy every client," said a caller described as a Sierra Madre, Calif., subscriber.
Another self-identified subscriber said: "It's awesome, taking a stand. It's a long time coming."
That caller said he knows of children too young to understand the content who've accidentally been exposed to it. "It changes them-they can't sleep after that," he said.
Others skewered the gatekeeper. "I'm tired and resentful of corporate megamedia juvenilizing us," said a caller from Santa Monica.
At least two of the callers, who stressed they had never even bought adult fare, said they would cancel their Adelphia subscriptions to protest the company's effort to impose its executives' views on consumers.
Rigas, in his statement, did leave the door open to reinstating the services if the local franchising authorities step in and mandate its return.
"Should the franchising authorities from those communities in which Adelphia operates approach us with requests for reinstatement of adult programming, we would naturally take those requests very seriously," he said.
But one area cable operator called that scenario highly unlikely.
"If anything, the local community would look to take off adult programming," said the operator.
The move comes as Playboy is looking to rev up its programming in an effort to compete with more explicit adult services like The Hot Network and The Erotic Network. Later this month, Playboy will debut "director's cuts" of movies aired during its Saturday night movie block, featuring more explicit sex scenes than what's typically shown on Playboy, English said.
In addition, several of the network's staple series, including
Amateur Naughty Home Videos
Night Calls 411
series, will feature more explicit adult programming. English said the more explicit fare would hopefully help operators in their efforts to offer Playboy as a premium service. The hotter adult fare generates nearly double the buy-rates that "standard" adult programming services pull in.
"What we're trying to do is help operators provide a more value-added, premium adult option to subscribers," English said.
Linda Haugsted contributed to this story.