Playboy’s unveiled its Internet strategy in the form of TheSmokingJacket last week. The headlines read: “Playboy launches nudity-free website aimed at bored office workers seeking laughs.” What is the goal, and will this internet property succeed?
Playboy, an iconic brand that peaked many years ago, faces many of the same “challenges as its peers in the media industry: increased competition for consumer attention in the face of shrinking overall spending in the television and print businesses, the migration of advertisers to other platforms, higher manufacturing costs and the uncertainty created by the current state of the global economy,” according to their annual report. The majority of Playboy’s revenues actually come from tv today, and not from it’s print business. Still, revenue is off nearly 30% since 2007, including a 33% drop in print and a 29% drop in tv revenues. The brand has swung to an annual operating loss of $40 million and the company is saddled with net debt of $80 million. Even porn was brought down by the latest recession. The launch of a new Internet brand, “The Smoking Jacket” is an interesting move. While the initiative might be 2 years too late, here’s what we do and don’t like.
What’s Smoking Hot
1) The strongest ad supported properties have a very distinct audience. TheSmokingGun will clearly skew male with a 25 – 34 year old target. It’s dubbed as “entertainment for the office” so it should attract an educated audience.
2) This appears to be a Gawker copy-cat model with an entertaining, social currency feel. Building a strong Internet property will enable development of adjacent or add-on web sites.
3) There is the opportunity to leverage Playboy content. By leveraging an existing editorial and photo infrastructure, the site can be run for less.
4) Playboy’s largest advertisers are retail / direct response, and one of its under-tapped categories is personal hygiene. The Playboy ad sales team will have a new Internet property to attract advertising.
5) Editorial strategy revolves around shorter, funny & entertaining content. Short content will generally get better bang for the fill in the blank.
What’s Ice Cold
1) For bootstrapping entrepreneurs, you can take heart in the fact that that The SmokingGun is starting with a page rank of 0. Yes, it’s Google Page Rank is 0. Certainly it will rise through the ranks quickly. Nonetheless, the execs at Playboy are going to have to be patient while this site takes 2 to 3 years to really catch on.
2) The Smoking Jacket is named after Playboy founder Hugh Hefner’s favorite pieces of clothing. We’re not in love with the name. It’s a bit long and clunky. Gawker and Mashable have it right with their names. And we’d like to give a shoutout to Sparxoo as a more Internet friendly and trendy name.
3) The business model smacks of web 1.0 or at best, web 1.5. What about commerce? What about user interactivity? What about games and engagement? Perhaps that will come in the second rollout.
We give credit to Playboy for taking a gamble and rolling out a new Internet brand. Investments in the Internet medium likely stack up stronger than throwing more money down the print drain. Directionally, this move is right. Will it reverse negative earnings momentum? If you say yes, you’ve got to be smoking it.