NEW YORK (AdAge.com) -- As Playboy Enterprises considers the dramatic new options suddenly before it -- an offer from Hugh Hefner to take the company private for $185 million and a proposal from FriendFinder Networks to buy the company for $210 million -- the emphasis is on the brand much more than the magazine that started it all.
"The magazine is the soul of the company and, of course, the company was founded on the popularity and emergence of the magazine in the culture," said David W. Miller, managing director for equity research in media and entertainment at Caris & Co. "But is it the most important part of the business? No. The most important part of the business is licensing."
Soul of the company all the same
But the soul of any company, not to mention a magazine that averaged paid and verified circulation of 2 million in the second half last year, can't be ignored.
There have been some promising signs lately. Ad pages in the first half increased 19.8% from the first six months of last year, according to the Publishers Information Bureau, partly because of a deal under which American Media has been selling Playboy ad pages as part of its Young Men's Network.
But Playboy's average paid and verified circulation in the second half of last year fell 22% shy of the level it had guaranteed to advertisers, according to its report to the Audit Bureau of Circulations. This year Playboy is again meeting its obligations, albeit with a more modest guarantee in place.
The median age of its readers has meanwhile been climbing, to 35.6 in the spring 2010 research report by GfK MRI from 33 in spring 2005, a 7.9% increase. The median age of adults who read any of the magazines measured by GfK MRI, on the other hand, increased just 3% to 44.7 from 43.4.
So does Playboy the magazine need an update if it's going to keep finding new readers?
That's not the thinking at Playboy. Jimmy Jellinek, the chief content office at Playboy Enterprises as well as editorial director for the magazine and its site, calls the idea that the magazine should chase younger readers a fallacy. "The moment you purposely try to go for younger readers, you're turning off younger readers," he said. "We occupy the political, moral and ideological high ground that the GQs, Maxims and all the other magazines don't. We've been around 57 years. Every fad in publishing magazines has come and gone and we're still here."
Both proposals now facing Playboy Enterprises would also leave Mr. Hefner -- founder and chief creative officer at Playboy Enterprises as well as editor in chief at the magazine -- with ultimate editorial control of the magazine.
Some people who think the magazine needs new life believe going private would be enough. Others, however, suggest that Mr. Hefner himself needs to exert less control over the title in order for it to progress.
Being public is the problem
"The problem with Playboy is that it's a public company, which has probably neutered it a bit," said Bob Guccione Jr., who founded Spin magazine and whose father created Penthouse. "It's diminished its editorial edge."
Belonging to a public company whose shareholders are obsessed with quarterly results makes it harder for the magazine to take risks that could hurt it in the short term, even if they benefited over the long term, according to Mr. Guccione. "You suddenly have a different set of masters," he said. "They want a specific return. They want predictable growth. There's such stress placed on quarterly earnings."
"Public companies do to very creative people what antidepressants do to sex drive -- they numb it," he added.
Mr. Hefner's bid to take the company back is the best thing that could happen to Playboy magazine, in Mr. Guccione's eyes. "I think Hefner's donning the armor for one last battle," he said. "Someone needs to inject new blood into it. It needs a transfusion. Ironically the guy who's been running it is probably the guy to give it a transfusion.
Too tight a grip
Mr. Hefner has always been deeply involved in the magazine's editorial look and feel, particularly the layouts, cartoons and nude pictorials, according to James Kaminsky, a media consultant and former Playboy editorial director.
So could the magazine benefit if Mr. Hefner reduced his editorial involvement?
"Sure, of course it would," Mr. Kaminsky said. "I don't think he'll ever do that. I think this is a bid to maintain control and have a company to hand off to his sons."
"I just think Hefner's used to doing things in a certain way and doesn't feel comfortable if it gets too far out from that," he said.
"Hef's always there," he added. "The question is whether the magazine can thrive in the future with him being always there."
Don't change a thing
As it so happens, FriendFinder Networks president-CEO Marc Bell is happy with the magazine just as it is. If there's opportunity that the magazine isn't grabbing, Mr. Bell said, it's more about marketing than the magazine's content or design.
"We are not looking to change the magazine, but hopefully we will be able to provide additional channels of digital distribution in order to improve the financials," Mr. Bell said.
"There are lots of different marketing possibilities," Mr. Bell added. "I think he really puts out a quality magazine. He's built a fantastic brand."
Mr. Jellinek said that Playboy's consistency over the years has served it well. "The fact of the matter is that American culture returns to us again and again," he said. "Look at American Apparel: Their entire marketing campaign, their entire existence is based on 70's Playboy. That's the strength of our brand, not based on something ephemeral or right now."
"The idea that Hef is the problem is ridiculous as well," Mr. Jellinek added. "Hef has never asked anybody at this company to do anything but be brilliant, cutting edge and cool."