Hot Networks Quietly Hit 20M Mark

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Explicit adult pay-per-view service The Hot Network has
quietly found its way into a majority of addressable cable and direct-broadcast satellite
homes, and it is redefining the standard for adult-PPV programming.

In just over five months since its launch, The Hot Network
and its sister service, The Hot Zone, have secured more than 20 million combined DBS and
cable subscribers, matching the 20 million reached by more traditional adult-PPV services
Playboy TV, Spice and Spice 2.

Hot Network president Bill Asher said the network has been
able to increase its subscriber base without the benefit of any major marketing pushes. In
fact, it hasn't been aggressive in pitching the services to operators, nor has it
developed any major on-air promotions to tout the product.

"The last thing we want to do is to cause discomfort
for our customers," Asher said. "Our first recommendation to our affiliates is:
Don't market the service, but let your customers find it."

Nevertheless, the service -- formerly Spice Hot, before
adult-content producer Vivid Video purchased it from Spice last year -- has found a home
on cable systems. It is carried by five of the top 10 MSOs in more than 150 cable systems,
Asher said. But he would not reveal specific systems.

The carriage has come despite running more explicit
adult-PPV programming than Playboy does. When Spice Hot first launched, some operators
were worried that the programming would cause a community backlash.

However, as operators upgrade to digital technology --
which provides more signal security -- industry observers said, systems have become more
accepting of the hotter adult version.

"We present our product in a manner that's
positive for the industry," Asher said.

Operators have also been lured by the performance of such
product. PPV executives said the hotter adult product generates buy-rates 50 percent to
100 percent higher than traditional adult-PPV product.

And, with operators taking splits as high as 80 percent on
The Hot Network -- compared with 60 percent to 70 percent for Playboy and Spice,
respectively -- and by charging a higher suggested retail price, system revenues are
higher for the more explicit product.

"We all knew what type of product generated the
highest buy-rates, and we're seeing those results in The Hot Network," Asher
said.

With basic and premium services continually pushing the
envelope of acceptable sexual content, and with the Internet offering very explicit
images, Asher said, the hotter adult-PPV programming is the new standard for PPV.

"The kind of product we provide is the perfect
complement for the new broadband services," he added.

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