• by Larry Dobrow , May 9, 2003

The publishing group of Playboy Enterprises didn't overwhelm anybody with its first-quarter performance. The group posted a $500,000 profit, but revenues were flat at $26.6 million and Playboy magazine rang up lower ad revenues than in the same period last year. But a better-than-expected overall performance by the company has Playboy publisher and vice president James Dimonekas anticipating a surge over the remainder of 2003.

"It's terrific news," Dimonekas said. "I don't want to harp on the earning aspect, because that's not really my place, but I'm confident the strength of the brand will come back to reward us."

In the first quarter of 2003, Playboy Enterprises posted net income of $0.6 million, compared to a net loss of $9.4 million in the same period last year (that figure included a $5.8 million non-cash income tax charge). Overall, operating income in the first quarter totaled $9.5 million, up from $2.2 million in the year-ago period; revenues jumped to $74.3 million from $66.1 million.

The company's entertainment arm turned a $8.0 million profit, while the online group was profitable for the first time ($0.3 million). The latter news was especially welcomed by Dimonekas: "Being profitable in the online area can only help [the magazine]."

As for the flagship magazine itself, some media pundits have painted Playboy as a publication on its last leg, unable to define its place in a market overrun by lad mags. Dimonekas, not surprisingly, believes the Playboy brand will never lose its luster with advertisers - and, in fact, remains as vital today as it has ever been.

"What we can do that our competitive set can't is sell partnerships with clients," he explains. "With us, it's not just about buying an ad or about where the ad will be positioned. Look at what we just did with the Mini Cooper - we had a photographer who usually shoots Playmates shoot the car in garages. There are so many things we can do outside the magazine."

To that end, Dimonekas recently hit the road to address advertisers' questions about Playboy's direction, which were likely fueled by the addition of James Kaminsky as editorial director last October. Dimonekas, Kaminsky and others traveled to the top six U.S. markets for what he described as "small, intimate" meetings with existing and potential marketing partners (the Los Angeles get-together was held within the gilded confines of the Playboy Mansion).

"With advertisers, the concern is more or less 'what are you going to do?'" Dimonekas says. "I think it was smart to sit down and get their feedback, find out what exactly they'd like to see in the magazine and tell them that there won't be huge changes. When you hire a new editorial director, everybody wants to know that day what will happen and see the changes in the next issue. That's not the way things work, obviously."

Playboy's marketing push is far from finished. In the months ahead, Dimonekas and his team plan to create a presentation intended specifically for advertising agencies ("we will pursue them aggressively," he says). As for changes to the magazine, expect nothing drastic.

"I think we need to talk a little smarter to younger guys, the ones between 21 and 29," Dimonekas admits. "But let me be very clear: this magazine is not broken. It does not been to be fixed. The idea is to open peoples' eyes to what we have to offer and show them why we're the only ones who can offer it."