2.14.2008
Playboy Enterprises Posts A Loss
For many years Playboy Enterprises was flush with cash, and always posted profits. Those days seem like a distant memory for the company, which posted a net loss of $1.1 million for the fourth quarter of 2007. Two major factors that have contributed to Playboy's poor performance are all of the free porn on the internet and the decline of print ad dollars available in general. Stockholders felt the pain, as the stock plunged to a year low on Wednesday. You can be assured Hugh Hefner isn't taking this news lying down. He may be wearing a smoking jacket, but he isn't lying down. Hef assured stockholders that Playboy is starting to capitalize on all sorts of interesting income streams. The company plans to invest in technology, and has already started the process of getting in bed with the most prominent cellular carriers in Europe.
Regardless of Playboy's efforts to gain new business, they aren't giving up on the print magazine. The company's management seems to understand the magazine's role as an ambassador for the brand. Everyone wants to party at the Playboy Mansion with the girls they see in the magazine, not the ones from the website. The next few years should prove extremely challenging for Hef, but we expect he'll weather the storm. You don't get to stick around for 55 years, unless you are able to adapt to the competitive landscape.
A PimpWiz Exclusive by Scott Bernstein
Labels: Playboy, Scott Bernstein
