Playboy Acquires Hot Network

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Further consolidating the adult pay-per-view market, Playboy Enterprises Inc. Monday acquired the television assets of Califa Entertainment Group, which includes explicit Hot Network, and cable-edited adult service the
Hot Zone, for $70 million.

The deal, part of an option Playboy obtained two years ago as part of its purchase of Spice Entertainment Co., also allows Playboy to acquire Vivid TV.
The three networks will be transitioned to the Spice brand, which earlier this year launched three triple X-edited digital PPV networks.

The three networks reached a combined 36.2 million households - although the number does include some duplication.

In addition, the company has reached an agreement for a 10-year extension of its current output deal with Vivid Video, Inc, which include video-on-demand and
video streaming rights.

The agreement leaves New Frontier Media Inc., which operates several PPV adult services including The Erotic Network (TeN), as Playboy's primary competitor in the lucrative adult PPV market. The category generated about $409 million in 2000, surpassing the $394 million generated by PPV events, according to a Showtime Event Television PPV report.

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