Playboy TV Pitches Subscription Version

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Playboy TV is pitching MSOs that are rolling out digital on
a subscription version of the network, in addition to pay-per-view channels offering
Playboy, Spice and Spice 2.

Last week, the company signed a five-year master
affiliation deal with Comcast Corp. The MSO hasn't committed to carry the channels on
specific systems, but Playboy expects local Comcast systems deploying digital cable to
carry the channels, Playboy TV Networks Worldwide president Jim English said.

Playboy hopes digital cable will boost distribution of the
subscription version of Playboy TV, which currently gets most of its carriage on
direct-broadcast satellite services DirecTV Inc. and EchoStar Communications Corp.'s
Dish Network, English said.

"We're back on the bandwagon with cable now that
digital is finally here," he added. "This is our time to be on the bandwagon,
saying, 'Let's get it right, right off the bat.'"

English wouldn't disclose how much revenue per
subscriber satellite providers offering both subscription and PPV versions of Playboy TV
generate, but he said cable operators could significantly boost their Playboy revenue by
offering both categories.

"We tell [operators], based on our DBS experience
… when you offer both, support both and promote both, you will have virtually an
equal amount of money coming from the two categories," he added.

Playboy TV was available in 12.3 million analog-cable
households, 11.9 million direct-to-home households and 700,000 digital-cable households as
of Sept. 30, according to the third-quarter earnings report Playboy released last week.

Analog-cable distribution increased by 400,000 households,
DTH carriage by 2.7 million and digital-cable distribution by 600,000 versus
third-quarter-1998 figures, the report said.

In addition to increased competition from other adult
programmers such as The Erotic Network, English said, Playboy faces new competition from
the increased amount of adult programming on premium channels like Home Box Office,
Showtime and Cinemax.

And, he added, network shows such as Ally McBeal are
also hitting Playboy. One recent episode featured a 30-second, open-mouthed kiss between
star Calista Flockhart's Ally and the character Ling (Lucy Liu).

"There are challenges coming from anywhere,"
English said.

Playboy's domestic television revenue jumped 23
percent to $19 million during the third quarter, "benefiting primarily from the
addition of the Spice networks, which were acquired in March," according to
Playboy's results.

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