It's a striptease at Playboy
The company posted disappointing second quarter reports this morning. Net revenue fell by 14% to $73.4 million, stung by weakness in Playboy's print and television businesses. It posted a loss of $0.06 a share, reversing a similar profit a year earlier. Wall Street's already bleak expectations were hoping for a profit of $0.05 a share on $81.7 million.
The only bright spot in the company's report is licensing, as the company milked its brand to deliver 4% revenue growth and an even better 10% gain in segment income. Unfortunately, licensing is still just 16% of the total revenue mix at Playboy.
What's going on? Well, let's just say that the world has passed Playboy by. Circulation rates at the namesake publication are down, and so are the number of ads and what sponsors are willing to pay for them. Its premium titillating television programming is losing ground to more risqué -- and cheaper -- adult entertainment available in cyberspace.
Yes, remember when the Internet was supposed to be the high-margin savior for the soft and hardcore pornography industries? Well, Playboy's dot-com popularity has stalled in the face of free and dirt cheap amateur sites. The company is hoping to relaunch Playboy.com later this year, but it's hard to get excited with a plethora of free alternatives in cyberspace.
The digital rub has smacked other public companies that dabble in smut. Raunchier rivals like New Frontier Media
Playboy is hoping that its brand and iconic bunny logo translate well globally. Whether it's an entertainment hub going up in Macau, the slow launch of the PlayboyU social networking experiment, or a programming presence on Sirius
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