Adult Networks’ Revenue Suffers As Content Gets Trickier to Find
Byline: ANDREA FIGLER
U.S. viewers were prudish in the third quarter, if earnings for adult content TV programmers are any indication.
Net revenue generated by Playboy Enterprises’ domestic television networks remained flat at $23 million in the quarter ending Sept. 30 compared with the same period last year, according to the company’s quarterly earnings report Nov. 7. And net revenue for the Erotic Networks, the television division of New Frontier Media, dropped 7% to $7.1 million in the third quarter, according to its earnings report Nov. 12.
New Frontier attributed a $500,000 revenue loss to a reduction of C-band subscribers as they switched to smaller satellite dishes. But even if those subscribers hadn’t switched, revenue growth for the television group would still have been flat.
New Frontier’s earnings lull can be attributed to the loss of DirecTV as a distributor. Early this summer, DirecTV dropped New Frontier’s softer channel, Pleasure, cutting the network’s carriage in half. This loss sunk the group’s overall household distribution for the three months ending in September to 34.5 million, slightly below what it was for the same period last year.
Playboy’s distribution increased significantly in the third quarter compared with the third quarter last year, with a 16.7% growth rate for Playboy TV and a 23.1% hike for the more explicit content. Despite this increase, however, Playboy’s domestic television revenue failed to grow.
Playboy’s CFO Linda Havard blamed the stagnancy in part on cable operators shifting adult content to digital tiers. Analog carriage of Playboy’s spicier networks dropped 32% to 12.5 million households in the third quarter this year compared with the same period last year. The softer Playboy TV also lost 26% of its analog distribution.
Dennis McAlpine, managing partner for McAlpine Associates, said that some of the analog adult content users may have turned a cold shoulder to digital, or perhaps they can’t find where the adult content is among the complex digital channel lineups. “Kids are the only ones that can find their [children’s] shows,” he said.
Distributors need to promote the networks to help viewers find their adult channels, he added.
DirecTV did a recent study showing that most subscribers did not know that Playboy TV was available on DirecTV, Playboy’s Havard said. This month, Hugh Hefner is on the cover of DirecTV Magazine, part of a combined marketing effort to get satellite subscribers in the mood this holiday season.
THE NEXT QUESTION:
*Will Playboy follow New Frontier’s lead and run ads on its adult channels?
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