A NEW ERA FOR PLAYBOY TV

Premium Net Reaches for Broad Appeal As Its Iconic Brand Reaches 60
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When Hugh Hefner launched Playboy magazine in 1953 with Marilyn Monroe on the cover, he was aiming for a product that would deliver the total male experience.

More than three decades after its launch as Playboy Channel, Playboy TV has similar goals. That means offering up content that appeals to both men and women on a channel that is quickly reaching parity with other premium networks on the dial.

“Playboy TV’s biggest opportunity is in motion, as MSOs are repositioning the channel as the fifth premium, alongside HBO, Showtime, Starz and Cinemax,” senior vice president/general manager Gary Rosenson says. “You don’t hear a lot about MSOs increasing revenue streams from programming maneuvers, but many are with Playboy TV. The biggest challenge is always speed of execution.”

Playboy magazine was a phenomenal hit from the start and it didn’t take long for Hefner to recognize the power of the brand. Before too long, there were Playboy bunny cufflinks, clubs, parties and even a syndicated TV show titled Playboy’s Penthouse.

The show, launched in 1959, was hosted by Hefner (who appeared on screen in a suit and tie, rather than the iconic pajamas he’s sported for several years) and ran in syndication for two years. Hefner dabbled in TV again in 1969, when Playboy launched Playboy After Dark, which had a similar format but was taped in Los Angeles, rather than the Windy City.

By the end of the 1970s, it was clear television was going to be the next best place to expand Playboy’s brand. But it was Cablevision Systems chairman Charles Dolan who really got the ball rolling when he called then-Playboy Enterprises CEO Christie Hefner suggesting the two companies team up on a new venture dubbed Playboy Channel. Dolan needed programming to fill his ever-expanding channel lineup and Playboy needed a built-in mechanism to sell and deliver the service to customers.

The channel launched on Nov. 1, 1982, in 750,000 homes on 450 cable systems nationwide. Cablevision eventually sold its equity in the network to Playboy Enterprises in 1986.

A television network was a natural extension of the Playboy brand and operators liked the money the network generated.

Like other independent networks, Playboy has lacked the leverage other multi-network companies have in carriage negotiations. But Rosenson maintains the power of the brand and the programming has swayed distributors and attracted viewers.

“Our independent status means we have to deliver value because our carriage depends on it,” Rosenson says. “We’ve been adept at doing exactly that. We are nimble and we can make decisions quickly to meet the desires of our viewers. Without the leverage of other networks, we have to evolve and we have done that.”

MODEL HAS MORPHED

Indeed, Playboy TV has been successfully morphing with the times, as well as with the tastes and technologies of the day. Playboy Channel was relaunched in 1989 as a pay-per-view network called Playboy at Night. Within a year, it was the third-largest PPV programming service.

In 1994, DirecTV launched Playboy TV as a pay-per-view service and premium network, giving the company two outlets for its programming. Playboy launched its first website that same year and by 1997, it was marketing the Playboy CyberClub, an online subscription service, to customers. In 1999, Playboy bought Spice Networks for $100 million, which gave it the harder-core edge it had traditionally steered clear from.

By the turn of the century, there was plenty of competition for adult fare on TV and on the web. Adult websites — both paid and free — proliferated like rabbits. Playboy needed to pitch and roll again if it wanted to remain relevant.

“As more hard-core options came up, the PPV model was not working as well for us,” Rosenson says. “We have always been serial-driven, and we believed we needed to become a subscription multiplex. That is what we offer today.”

Playboy TV currently consists of Playboy TV HD, Playboy TV 2, Playboy TV en Español, and Playboy TV On Demand. In 2010, Playboy TV ventured into the mainstream by presenting its new reality programming block at the Television Critics Association Tour in Pasadena, Calif., appearing alongside such networks as Discovery Channel, AMC and HBO. It was the debut of the network’s renewed push to lure couples and women to its fold.

In many cases, Playboy TV has reached parity on the dial with other premium channels, which was the major goal for Rosenson and his team. A renewed emphasis on delivering programming both men and women can watch and enjoy has been successful.

“TV is a shared device,” he says. “We embrace the notion of co-viewing programming.”

Playboy TV’s success in delivering programming that appeals to both men and women can be attributed to several factors, including a cultural shift in what’s acceptable and enticing to both sexes. Mainstream media — including women-centric magazines such as Redbook have also begun writing about adult fare with a positive spin in recent years. What was once considered controversial in 1982 almost seems quaint by today’s standards. MSOs that years ago shied away from promoting adult programming, despite its strong financial returns, have begun marketing Playboy TV more aggressively.

Call-center representatives are beginning to sell the service with more regularity, Rosenson says, and that is helping push the subscription numbers up. “We’re seeing monthly upgrades 200% to 300% higher in markets where the call centers are actively upselling Playboy TV,” Rosenson says. “Certain MSOs have embraced upselling the product and it is having a tremendous impact on the numbers.”

Playboy TV has toyed with the idea of creating an ad-supported network over the years. Softer programming could be easily created and syndicated both domestically and internationally. But it’s unlikely Playboy TV will launch a basic, ad-supported network in the U.S. any time soon, mainly for the same reason other content companies aren’t launching new linear networks: It’s financially challenging and difficult to sift to the top of a viewer’s list when there are 500 channels competing for consumers’ attention and advertisers’ dollars.

UNDER NEW OWNERSHIP

By 2008, Playboy Enterprises was in a downward spiral on Wall Street. The company’s stock was tanking. Financials were weak and Christie Hefner, who had led the company through some of its most aggressive expansion efforts, stepped down as CEO.

In January 2011, Hefner took the company private. Less than a year later, the Manwin Group took over management control of Playboy Enterprises’ television business.

Last October, Manwin owner Fabian Thylmann sold the company to its management team, who in turn, changed the company’s name to MindGeek. The company boasts almost 100 million unique daily Web views, and Rosenson says there are opportunities and solutions that would drive adults back to the TV platform using a reverse authentication process.

When it comes to TV Everywhere, Playboy TV is experimenting with a reverse authentication process that leverages MindGeek’s massive online traffic to drive adult online consumers back to TV. Globally, the adult industry rakes in about $97 billion, New Mexico State University professor Kassia Wosick told NBC News earlier this year. But revenue from traditional adult films has been shrinking, due to the abundance of pirated material and free content on the Web. By reverse-authenticating customers from the adult tube sites, Playboy TV can recapture adult subscribers and improve revenues, Rosenson says.

MindGeek’s extensive global reach could also help expand Playboy TV’s international aspirations. Playboy’s brand is even bigger outside the U.S., as many countries love iconic American brands, Rosenson says. The company continues to expand its reach in Europe, Asia and Latin America.

Playboy TV launched the first ever channel for adults in South Africa and the network was just launched in Thailand, which despite being an adult playground, doesn’t allow nudity on television. To get around that, Playboy TV created its first lifestyle channel targeting Asian men, appropriately named Lifestyle TV.

“We think U.S. operators will look at this to round out their Asian tiers as well,” Rosenson says.

Playboy TV has successfully ridden the cable wave as it has pitched, rolled and grown over the last three decades and it’s a sure bet the company will continue to find new ways to reach customers.

“The other premium channels have dabbled in the adult space and there are several hard-core options for viewers today,” Rosenson says. “But Playboy TV has carved out its own unique space with highquality programming you won’t find anywhere else. It’s what makes us different and attractive to viewers and MSOs.”

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