Playboy CEO Sees Streaming as Key Driver

NEW YORK — Content drives commerce. It’s been the mantra du jour for the last couple of years, but the keynotes manning both Fall
Internet World 2001 and Streaming media East 2001 in New York saw fit to reinforce the notion. From AOL’s Bob Pittman, to Compaq’s Michael D. Capellas, the idea that content type
and quality will birth diversified revenue streams seems to be a universal point.

Playboy Enterprises Inc.
Chairman and CEO Christie Hefner, daughter of the iconoclastic men’s entertainment mogul Hugh, hammered the
point home yet again Thursday morning in front of a packed audience at the Jacob Javits Convention Center. But more than that,
Hefner discussed how her business plans to embrace streaming media to beef, and the entire brand, up.

In laying the groundwork for the strategy, which includes a $20 million project to build a digital media facility that offers live,
digital content for online TV (due some time in 2002), Hefner made sure to bust a possible preconceived notion about the brand’s
highly successful television arm. No question precipitated it, but she said Playboy TV is “not just viewed by a bunch of lonely
guys.” In actuality, Hefner said, some 70 percent of the viewers are couples who desire a rich adult entertainment experience. She
called Playboy TV a “social medium.”

Hefner also pointed out that the millions of consumers who access Playboy by print, TV and online are different and not necessarily
interchangeable. That is to say, the traditional print readers are not the same consumers as those who access the brand’s online
medium. Same follows for the TV customers. Hefner is proud that the more than 50-year-old company offers three distinct mediums that
all attract millions of readers, viewers, and even shoppers.

This foundation led to the prospect of making money from, which Hefner said she hopes to realize a profit some time next
year. Hefner outline a number of possible revenue streams, the first of which was advertising. Ironically enough, this is an area
that she said has never been a primary target for making money. Perhaps this comes as no surprise seeing as how Playboy is the
bellwether for an industry that sells itself.

Hefner showed how a Jack Daniels ad (featuring a younger Hef in a tuxedo, not a bathrobe and slippers) appears when users went to
access the home page before giving way to the actual site. She admitted that it was created using Flash technology, but said broader adoption of streaming can lead to more
creative ads.

Other areas where she feels streaming will help include the company’s e-commerce niche, online gaming, and live, streamed Playboy
events. Important in this, too, given Playboy’s worldwide appeal, is the enterprise’s continued push into international markets. The
outfit launched it’s German site two months ago.

It should be noted that specifics on the success of this from Hefner were scarce, as she said much of the firm’s streaming endeavors
are works in progress. Despite this, users of streaming may take comfort from a new study by Nielsen.Netrating study about broadband, which is vital for a consumers’ quality streaming experience.

The survey showed that the at-home broadband audience surpassed 21 million in November, growing 90 percent year-over-year and reaching an all-time high. Broadband fueled 94 percent growth in the streaming audience, reaching 40.7 million surfers.

“Surfers continue to seek high speed connections for quicker Internet
access, faster downloads and more aggressive Internet usage,” said T.S.
Kelly, director and principal analyst, NetRatings. “Broadband surfers tend
to log on to the Internet more often, stay online longer and are more likely
to shop online than narrowband surfers.”

This, for sure, is nothing but good news for content-drien companies such as Playboy.

When it came time for questions and answers, Hefner was asked how her father Hugh fit into the picture.

“Hef is involved in all of the online aspects,” Hefner said. “He is the creative guru, the keeper of the flame.”

Daughter Hefner also addressed’s recent security breach, in which a group of hackers claimed to
have had access to customers’ personal data since 1998. She said the company is currently working with security consulting firm
@Stake and the FBI to take preventive measures against future attacks. Hefner also vowed to pursue any intellectual property/asset
thieves aggressively.

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