{{ searchResult.published_at | date:'d MMMM yyyy' }}

Loading ...
Loading ...

Enter a search term such as “mobile analytics” or browse our content using the filters above.

No_results

That’s not only a poor Scrabble score but we also couldn’t find any results matching “”.
Check your spelling or try broadening your search.

Logo_distressed

Sorry about this, there is a problem with our search at the moment.
Please try again later.

Playboy is the world's iconic 'male magazine' but it's had a hard time keeping its relationship with consumers and investors spicy.

The company's story resembles that of media businesses today: evolving markets have changed the game, brought new competition and eroded old competitive advantages.

Part of Playboy's problem is identity; it struggles to define itself in a world that is far more risqué and far less print-friendly than when it rose to prominence.

But putting aside the industry that Playboy competes in, PaidContent.org had an interesting post earlier that I thought was worth mentioning. Despite the fact that Playboy's digital revenue shrank 24% last year to $15.6m, the company's recent 10K filing with the SEC indicates that its digital production costs grew 25% last year, to $8m. Digital now accounts for 14% of its total production costs, up from 9% in 2007.

Obviously Playboy is placing a lot of faith in digital's ability to create a bright future. Has Playboy fallen head over heels for a business model that doesn't love it back or is it putting in place the foundation for a happy long-term relationship?

I think it's more likely the latter. Although Playboy clearly needs to find a digital strategy that works and it shouldn't spend more money just for the sake of spending more money, it won't be able to develop a workable digital model (no pun intended) by cutting its digital production costs to an anemic level.

It's often suggested that smart brands don't cut ad spend in a recession; instead they increase spend so as to take advantage of competitors who do cut back. I think Playboy's situation is akin to this and can be applied to a lot of companies in many industries.

If digital is important to your future, now is not the time to cut back; in fact it may be the perfect time to increase spend due to decreased costs (deflationary pressures exist in many parts of the world) and to gain competitive advantages over weaker competitors who are cutting back, giving you opportunity that they've forfeited.

Even if Playboy's new relationship doesn't work out, like so many other media companies it can't fall back on its ex (print). It has to invest in a new future.

Photo credit: Alan Light via Flickr.

Patricio Robles

Published 17 March, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2401 more posts from this author

Comments (0)

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Daily Pulse newsletter. Each weekday, you ll receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.