Playboy: Teaching an old bunny new tricks

The company is trying to become less smutty and more aspirational. Can this new formula keep the house that Hefner built financially and culturally viable?

By Bruce Kennedy Feb 21, 2013 4:09PM

Playmate Sara Jean Underwood holds a copy of the June 2007 issue of Playboy magazine (© Mary Altaffer/AP Photo)Can Playboy Enterprises successfully retool its image and its business model?


It's a whole different world since Hugh Hefner's ground-breaking magazine with nude centerfolds helped usher in the so-called Sexual Revolution of the 1960s.


In recent years, with a rapidly changing culture and the availability of sexual content nearly everywhere on the Internet, it appeared the whole once-hip "Playboy Lifestyle" marketed by the company had become as passé as an old Rat Pack movie.


So, Playboy is facing twin challenges: to remain both culturally relevant and financially viable in a fast-changing world.


As a recent Wall Street Journal report pointed out, that job has fallen to Scott Flanders, who became Playboy Enterprises' CEO in 2009 and is the first chief executive from outside the Hefner family. He has brought in changes that are apparently rattling some long-time employees, including taking the company private, moving it to Los Angeles from Chicago, cutting staff by 75% and outsourcing a considerable part of its business.


In 2011, Playboy closed a deal with Luxembourg-based "adult entertainment" giant Manwin, which took over the operation of Playboy's TV and online businesses. Vintage Playboy centerfolds and covers now adorn pricey designer T-shirts from fashion's Dolce & Gabanna. Both moves, according to the WSJ, are part of Playboy's efforts to reposition its brand as less smutty and more aspirational.


Perhaps an even bigger deal in the works is a partnership with Apple (AAPL). The Journal says Playboy has put together its first iPhone app, containing no nudity but instead "featuring lifestyle tips, articles from the magazine and, of course, photos of beautiful women."


The company's licensing revenue has soared from $37 million in 2009 to $62 million for the year ending in September. But as the WSJ points out, "the revenue stream is often uneven." The digital and TV content Manwin controls is reportedly not generating enough revenue. And the closing of the Palms Casino's Playboy Club has taken away an additional $4 million in annual licensing payments.


Standard & Poor's, according to the WSJ, believes Playboy is performing below expectations and recently warned it might downgrade the company's credit rating.


Flanders himself has come under fire. He underwent sensitivity training after a female employee filed a complaint against him for verbal abuse.


But he told the Journal it wasn't a matter of abuse but of straight talk. Playboy, he said, was a company that "required radical change financially, but also culturally" when he came on the scene -- and that he told employees "in very direct language" that "they were part of the problem."


As for his company's prospects, Flanders told the WSJ that Playboy would be "well-positioned to pursue a public offering" toward the end of 2014.


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88Comments
Feb 21, 2013 7:49PM
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Porn is porn and is free everywhere now. Playboy should set itself apart by continuing to emphasize all the other things associated with being a successful guy -- etiquette, good clothes, good taste, good booze, music AND being good in bed. As a teen, I learned more about being a guy from the magazine than I learned about p---y.

Feb 21, 2013 5:28PM
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I was around 11 in '53 when the first Playboy came out....it was a shock!  Semi-nude women in color!  Men's magazines had suggestive photos and some smelly cigar stores sold "sunshine and health" (nudist) magazines from under a counter.  Hot were the Fredericks of Hollywood ads---drawings.  Hefner has had a 60 yr. run and how can it compete with free porn sites? 

Feb 21, 2013 7:50PM
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hard to think of Playboy as not smutty. you happen to have an 80 some year old guy pumping viagra to keep 20 year old girls happy. If that isn't a sick thought what is?
Feb 21, 2013 8:49PM
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I have been a subscriber for over 35 years and when my subscription expires i will not be renewing. The new format and layout sucks. The articles are nothing but full on liberal crap anymore and the whole love affair with metro-sexual men and Bill Maher is disgusting. Where the hell is the old Playboy? When Hef turned over control of the magazine to his daughter it started going downhill fast. Now, it is nothing more than a 2nd rate rag that gets tossed once read. it has become kind of a Cosmo for men actually - only with a few naked ladies tossed in. The new rag is BS in my opinion.
Feb 21, 2013 7:40PM
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They are way over thinking this. It's porn. Soft porn, but porn. Show some skin and it will sell.
Feb 21, 2013 8:53PM
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ricki319

 

At Hefner's age viagra is a suicide pill.

 

Playboy is a male fantasy, that's how he made multi-millions, every man's dream.

Most 80yr. old men are wearing Depends, that most likely includes Hefner.

 

Hefner keeps 20yr. olds happy? The money keeps them happy, as well as iron clad legal contracts.

 

Hefner used his own daughter to promote his "image."

When women's lib was crying exploitation of women, he made his daughter CEO of Playboy.

See, I don't exploite women, my daughter is a smart executive that keeps her clothes on!

 

Why didn't Hefner put his daughter in Playboy as a playmate?

He wouldn't do THAT to his daughter, only YOUR daughter.

 

Feb 21, 2013 9:08PM
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oldnumber7

 

Playboy teaches men how to please a woman, how to be good in bed??

 

Playboy creates a fantasy life-style, end of story.

Feb 21, 2013 8:30PM
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Is "RETOOL"a play on words,or is it what Heff needs every 24 hours?

Feb 21, 2013 8:18PM
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Can't last forever. Playboy Clubs closed because of topless bars. Now with all the free porn on the internet, Playboy will just fade away. Playboy TV real bad.  Hardcore porn much better!      
Feb 21, 2013 8:28PM
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I don't think there is much of a market anymore but it would be nice to see it continue.  It is sort of an American icon and it would be a shame if it were to go away.  It has been a rag for so many years now so how do you turn it around?  How good is Hustler doing?  Is it still around?  Penthouse still around?  With the internet where is the market for these types of magazines?
Feb 21, 2013 7:51PM
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Everything these days is changing faster than the speed of light.  It is the sign of the "computer/internet" age.  Companies have to morph themselves from their original business model or it will be too late for them.
Feb 21, 2013 9:46PM
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Playboy is a fairly large magazine and considering its size there are actually relatively few nude photo  spreads. The fact is, Hefner was more interested in having a mens magazine that had stories about many things- politics, humor, lifestyle, sex, etc. It has always been well above the other such magazines. Many people actually do read it for the articles.  All physical print media are seeing lower circulation rates in the digital age. 
Feb 21, 2013 8:11PM
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Society is turning into a demoralized, desensitized peice of crap.  When playboy was published in the early days, it was considered a form of art,  a form of beauty.  Now you have porn which has no place in the main stream of society.  Everything was kept private, behind closed doors as a tool for masturbation.  I myself kept it private. As I grow old I realize, everyone knows.  It is an unwritten rule with guys that was not talked about, not brought out in public.  Now, porn is the main stream.  Men and some women talk freely about viewing porn and give details.  Too many children are being exposed to it.  If playboy is going to continue, I think they need to keep it clean and sophisticated.  Please do not lower yourselves to the low standards to compete with porn.  By going online and with apps for cellphones, you are exposing young children to something they have no business getting ahold of.  You know they lie about there age to get access online.  It is my opinion, no one cares about our society.  They only care about the end result of sexual and monetary satisfaction. 
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Considering all the free porn out there hard and softcore they're lucky to be in business. They need to go back and adapt the playboy lifestyle of the 60s for this day and age.
Feb 21, 2013 9:15PM
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VINCE

 

You are a sexist male-chauvanist.

Playboy went downhill when his daughter took over?

He used his daughter to shut up critics and the women's libbers.

 

Bill Maher is the most vulgar man on earth.

Yet, the liberal media let's him spew venom everyday.

Feb 21, 2013 11:34PM
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playboy has never been smutty, artistic photos of beautiful women. that is as far from porn as you can get. ricki heff is a icon hes not poping viagra to keep twenty year old girls happy, his money does that. the viagra and the twenty year old girls are to keep him happy.
Feb 21, 2013 9:05PM
Feb 21, 2013 11:38PM
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I'm a long time subscriber but I admit for the last several years each renewal has been in question. I get so tired of their glorifying Hef and the parties that make them look like a bunch of aging buffoons, but still they have several quality articles in each issue I'd miss. Its been obvious they're struggling financially, recycling interviews from the past and photos of women from issues of other countries.  I suspect their salvation could be de-emphasizing Hef and his stupid mansion and getting back on the cutting edge of the fight for womens' rights and sexual freedoms. Playboy's never been smut; no reason to de-smut.
Feb 21, 2013 9:16PM
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playboy is as cheesey as mike meyers doing austin powers - only mike meyers is trying to spoof a genre. playboy takes that whole "playboy lifestyle" of the 60s way too seriously. even apple is not going to make you look hip.  you look more dated that jane fonda in barbarella.  give it up, hef. you and your magazine and its image are old.
Feb 21, 2013 9:09PM
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as long as there are no GMOs , animal abuse or child labor, should be good to go these days, Playboy is pretty tame compared to real life. The articles are pretty good ...... and the jokes and limericks... oh boy,  here comes Playboy! ^^
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