Playboy: Hugh Hefner's empire is not living up to the fantasy

Fourth quarter earnings for PEI’s media arm, which consists of TV, video, print and digital, fell by 13 per cent. Print and digital briefly bounced back following publication restructuring, as well as the smart move of featuring Marge Simpson on the cover of the November 2009 issue. But these two categories are still losing out.

Consumers have cut their budgets on subscription-based content for TV and online. And restructuring, which saw this year’s January and February issues combined, might not be a long-term strategy - it is already expected to cause a 47 per cent decrease in ad revenue for this year’s first quarter.

In Asia, the picture is not much brighter.

Playboy magazine is banned in most Asian countries, including India, mainland China, Myanmar, Malaysia, Thailand, Singapore and Brunei, though Japan has a special edition with less revealing content.

Plans to expand in Asia through a joint venture with Macao Studio City, leading to a Playboy-inspired 40,000 square-foot complex, was canned in 2007.

Australia discontinued the magazine in 2000 due to a decline in sales.

The Playboy TV network has fared better, rolling out in several Asia-Pacific markets, including Australia, New Zealand, Hong Kong, Taiwan and South Korea.

The only truly promising section on the Q4 balance sheet is licensing, and in Asia, PEI has signed an exclusive agreement with IMG Licensing Worldwide on apparel, accessories and other products.

PEI has already penetrated the region with its related merchandise. Despite Playboy’s 1970s retro image, the brand has retained cult status with young hipsters. Apparel is widely available and Playboy concept boutiques have become established in several cities .

But as the Playboy Mansion’s foundations start to shake, can the popularity of its retail lines be sustained, or will the poor sales of its core product mean the Playboy logo will become an outdated relic?

Brand health diagnosis

Nirvik Singh, chairman and CEO of Grey Group Asia Pacific: “There may be several reasons for the troubled fortunes of Playboy magazine - the rise of younger, trendier magazines like FHM and Maxim and the changing nature of the entertainment business, which has become more accessible, affordable and increasingly competitive. There’s also free content online.

However, while the magazine may have seen a sharp fall in subscriptions and reported staff cuts, Playboy Enterprises has a strong licensing arm that ensures Playboy’s trademarks and images appear on a wide range of products, such as jewellery, clothing, fragrances and accessories.

Playboy offered a window into a new lifestyle for the previous generation. From a purely entertainment and content perspective, the magazine does not seem appealing to the current generation that can access a lot of content online.

In Asia, Playboy had a mystical charm. It was American, and in a continent where the word ‘sex’ was only whispered, it was one of the most sought-after brands. Unfortunately, it’s a great heritage brand that has not kept up with the times.
Tough times tend to be toughest for powerful brands, but Playboy may yet remain a force in the media and entertainment business.”

Jonathan Cummings, MD of Start Creative Hong Kong: “Like the bowtie-wearing rabbit on its logo, the Playboy brand is a strange creature. In the 56 years since it launched, the market has changed immeasurably and the world’s best-known ‘top shelf’ magazine now seems to sit more comfortably with mainstream counterparts. As founder Hugh Hefner nears his 84th birthday, his publishing operation faces a fork in the road - to stick to Hef’s original formula or to position itself closer to the more explicit content that is now widely available.

It may seem counter-intuitive, but I think the key to Playboy’s future success lies in a little less flesh with a little more mystery. Western markets, fatigued with overtly sexual content, have demonstrated a substantial appetite for old-fashioned glamour - witness the popularity of brands such as Agent Provocateur, or the re-emergence of Burlesque.

By refocusing on its original values, dropping the cheesy licensing deals and offering exclusive experiences and a slicker online presence, the ‘handbook for the urban male’ could reposition itself as a prestige brand. In new markets, especially China, where the brand enjoys huge recognition, Playboy should set itself within the men’s lifestyle sector, where many Western titles have made inroads .”

This article was originally published in the 11 March 2010 issue of Media.