Almost exactly two years ago, I wrote a short piece on Hugh Hefner’s leveraged buyout of Playboy Enterprises and commented that the company was transitioning away from its traditional adult media businesses and into licensing and brand management. Essentially, founder Hugh Hefner wanted to turn his company into something like a Dolce & Gabbana, but with an edgier reputation.
It was easy to understand Hefner’s motivation. The Internet had taken a wrecking ball to his business model. Magazine and newspaper sales are in terminal decline. (Remember, men buy Playboy for the articles. Really.) And it’s difficult to turn a profit in adult media given that you’re effectively competing with free.