Playboy to Push Monthly Subscriptions

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Hoping to maximize revenue, Playboy TV will seek to get
operators to offer the adult network as a monthly premium service, along with traditional
pay-per-view distribution.

The service will launch a multifaceted promotional campaign
touting the benefits of adult-premium subscriptions and PPV sales beginning in March,
senior vice president of marketing Loly Hlade said.

The promotion, dubbed "Playboy TV's Oasis,"
will begin May 13 with a network preview. Subscribers will be able to sample a four-hour
block of the network's original programs for a suggested retail price of 99 cents.

During the preview -- which will feature original adult
shows such as Night Calls -- Playboy TV will also promote its first-ever
interactive movie, Fast Lane to Malibu, Hlade said.

After the preview, subscribers will be offered Playboy on a
monthly basis at a discounted price -- about one-half the regular $12.99 to $14.99
subscription price, Hlade said. Once the introductory month is over, customers can
continue receiving Playboy TV at a regular monthly price.

"Playboy TV's Oasis is a national campaign
designed to drive both the PPV and subscription businesses," she said.
"Additionally, this campaign will offer viewers the opportunity to sample the best
original, adult-themed programming available today."

While some cable systems still offer Playboy on a monthly
subscription basis, most offer the network in PPV blocks throughout the day.

Although Playboy TV generates double-digit monthly PPV
buy-rates, Hlade said, the network decided to emphasize premium sales after experiencing
success with both premium and PPV offers through direct-broadcast satellite services. She
added that premium subscriptions represent at least 70 percent of Playboy's DBS
revenue.

"EchoStar and DirecTV offer both premium and PPV, so
the size of the revenue pie is larger there than it is in cable," Hlade said.
"There are two different consumers: PPV users who don't want to have the adult
product in their homes all of the time, and those who are receptive to Playboy on a
consistent basis."

While Hlade would not speculate on how many premium
subscriptions the network expects to generate from the promotion, she said Playboy's
premium push with operators would continue for several years.

"The process will run for about 18 months to two
years, and it is geared toward digital cable," she added.

One East Coast operator executive said he would consider
offering Playboy TV as a premium service only on the system's digital tier. "I
think some subscribers would be receptive to getting Playboy as a premium service,"
the executive said.

The network will begin a trade- and consumer-publication
campaign in March touting premium sales. Playboy TV will also provide affiliates with
marketing materials promoting both PPV and subscription. "We'll also have
considerable national television and print media," Hlade said.

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