In an interview after Playboy Enterprises' annual meeting this month, Chairman-CEO Christie Hefner said the publishing conglomerate is poised to offer pay-per-view events over the Internet.
The events won't be ordinary fare like boxing or wrestling matches, however, and won't be offered on TV. Instead, Playboy is laying plans for interactive events that would allow computer geeks to talk to event participants.
"I can envision a global New Year's Eve party at the Playboy mansion, with cameras right there broadcasting the event onto the Internet," Ms. Hefner said.
CHAT WITH HEF
Of her father, Hugh, Playboy's 71-year-old chairman emeritus who has endorsed the concept, she added: "Pay-per-view guests could actually carry on conversations with Hef and the other guests at the party. The technology exists to do this now."
The idea, almost certain to be tested in 1998, is an outgrowth of Playboy's expansion into all niches of electronic media. The company was one of the first publishers to establish its own Web site (www.playboy.com) in August 1994. In July, the company launched Cyber Club (http://cyber. playboy.com), a members-only Web site filled with material from Playboy's adults-only library that charges $60 for a yearly membership.
With no promotion, Cyber Club now has 16,000 members, and is nearly at the halfway point in its bid to become profitable, according to the company.
"We made the Cyber Club launch a quiet one because we didn't want to crash the site with too much volume," Ms. Hefner said. "We expect it to be profitable by the end of next year, and we're on track to achieve that. We'll begin advertising support within a month."
LINKED TO CYBER CLUB
The pay-per-view events will be linked to the Cyber Club. Ms. Hefner says events ranging from backgammon tournaments to photography sessions with Playboy models could be candidates for viewing.
She prefers the Internet over cable TV as a platform, she said, because cable operators' fees sap much of the profit out of a pay-per-view event.
Wall Street analysts believe Playboy may have just scratched the surface so far in its effort to leverage its brand name beyond Playboy and videos. Its licensing division did $2.4 million in sales in the quarter ended Sept. 30, while the company's overall revenues rose 3% to $68.2 million and earnings rose 10% to $1.1 million.
A bigger Internet presence will expand the brand's reach, said observers. "Think of what Walt Disney [Co.] is doing with its brand," said Stewart Halpern, an analyst at Furman Selz, New York. "They're opening Disney stores and restaurants and even starting a Disney Cruise Line. Playboy is in an analogous position. They have the pre-eminent brand in adult entertainment, but haven't really exploited that yet."
In the fiscal year ended June 30, Playboy's revenues rose 7% to $296.6 million, while earnings expanded fivefold to $21.4 million, though a one-time tax benefit of $13.5 million accounted for much of the profit rise.