Online Vies With Print For Playboy's Centerfold

In a Hollywood Reporter interview published Dec. 4, Playboy founder Hugh Hefner stated what had been obvious to most media observers for some time: that Playboy's print edition is no longer the major source of the company's income. While the interview, which also featured Playboy Enterprises Chairman and Chief Executive Officer Christie Hefner, didn't discuss where the company hopes to make up the difference, it implied that online ventures were essential to Playboy's prospects for future success.

Mention this to president Randy Nicolau and he lets out a quick laugh, as if to suggest that he's been told this in private more than a few times. "Everyone here views online as the driver of our growth in the future," he says. "Don't get me wrong - the magazine will always be the hub of everything we do. But I think we've barely started to mine the potential of the Web for us."

Heading into its 50th anniversary year, Playboy remains an iconic brand, even if the magazine itself has endured its share of rocky times. According to the Publishers Information Bureau, ad pages are down eight percent in the first ten months of 2003 against the year-ago period. Still, nearly six months into the tenure of vice president and publisher Diane Silberstein, the ship seems to have been righted: the January 2004 anniversary issue promises to be the biggest revenue-generator in the company's storied history. Similarly, the company predicts sharp growth for 2004, claiming that advertisers have responded to the mag's new direction under editorial director James Kaminsky, who was poached from Maxim in October 2002.



And this, Nicolau says, can only mean good things for the company's online arm. As it is, Playboy's online business boasts the company's highest margins and growth rates. The site now features around 25 subscription-only areas, and is taking advantage of everything afforded by the magazine's legacy. For instance, during the year-long buildup to the 50th anniversary celebration, reprinted some of the mag's most famous images (duh) and interviews, with multimedia content such as audio included.

"There are things we can do on the Web that obviously can't be done in a single issue per month," Nicolau notes. "We reprinted Hef's original manifesto for the magazine. We're highlighting the auction that Playboy is doing with Christie's. There isn't much that we're not involved with, really."

What makes him even more bullish is the response from major marketers. Given the size of Playboy's online presence, the company can offer brands like Southern Comfort and HBO the opportunity to partner on what Nicolau calls "in-depth microsites" accessible via Southern Comfort sponsored the site's Mardi Gras coverage, while HBO has played a large role in promotions centered on boxing. "We're not too eager to run special buzzes or banners. Anything we do with a marketer has to be integrated into the content," Nicolau explains. "Also, it has to be relevant to our demographics - like if the AARP came to us, I'm guessing there's probably not a fit there."

As for potential targets for 2004 and beyond, he's eager to lure automobile and motorcycle manufacturers: "Those companies have been hesitant, but we certainly hit their demographic." Nicolau would also like to be in business with MTV. "We always bump into them at places like Spring Break, but we've never once sat down for a meeting," he says. "With our assets - Hef, the bunnies - I think we can bring unique angles to the content they're already producing."

Nicolau is also chomping at the bit to take advantage of opportunities afforded by wireless marketing, noting how Playboy already beams images to wireless aficionados in Europe and Asia. "Sooner or later, the U.S. is going to catch up to the rest of the world with cell phones," he says. "Hopefully we'll be there to take advantage when it does."

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