It's a striptease at Playboy (NYSE:PLA), but investors don't like what the adult entertainment giant is taking off.

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 (NASDAQ:NOOF), the online arm of Rick's Cabaret (NASDAQ:RICK), and Spain's Private Media Group (NASDAQ:PRVT) are struggling to grow.

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 (NASDAQ:SIRI), Playboy's name is strong enough to compensate for the gradual erosion of its original monthly magazine. However, until licensing revenue is more than enough to offset declines elsewhere, growth investors may want to gawk elsewhere. Playboy may be taking it all off, but its shares won't be taking off anytime soon.

More on Playboy's undressing:

Playboy has been singled out to Rule Breakers readers. If your idea of a perfect centerfold is a portfolio scorecard with market-thumping picks, take a sneak peek at the growth stock newsletter with a free 30-day pass.

Longtime Fool contributor Rick Munarriz wonders if online centerfolds come with staples in the middle. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.