Playboy Call: Pay Site Revenues Face Possible Declines Until Web Relaunch

imagePlayboy (NYSE: PLA) executives sought to gird themselves against further struggles due to the decline of print, challenges to its pay-TV business and the focus on the current website overhaul that will reduce revenues and resources until Q4. CEO Christie Hefner outlined the process of the website revamp, which the company also highlighted back in Q1, saying the first step was to determine content strategy. Mainly, the site will promote more multimedia and community, as well as greater integration with the magazine. Despite the online ad growth, ecommerce is struggling, as pay site revenue decreased and Playboy doesn’t expect that to rebound until the website is relaunched in Q4. “We do not believe the changes in the magazine industry are cyclical and are trying to manage it with cost-cutting and building up online. In the short term, pay site revenues have flattened as resources have shifted to the web redesign project,” said Hefner

Meanwhile, CFO Linda Harvard said that in general, online ad revenue increased, with its eighth consecutive quarter of double digit gains. Elsewhere, the trend trend toward VOD on cable has eroded Playboy’s former gains from pay-TV. To try to make up for that, Playboy plans to ramp up efforts to related to subscription VOD services.

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