Eyes wide open
In her 17 years as Playboy CEO, Hefner has made a name for her ability to deliver the Playboy brand to new audiences. She’s even trumped conventional wisdom and looked for ways to draw women into the company’s demographics.
"Television, as a segment, is our single biggest profit center," she says. "From a financial perspective, it’s been very successful. For Playboy itself, it’s had additional benefits. Moving from the magazine to Playboy TV gave us an opportunity to expand our market to women because the majority of viewing of Playboy TV is by couples."
And Hefner has capitalized on that.
"We have built on that with our licensed products division, which has a strong base in women’s apparel and accessories, as well as in men’s," she says. "That was very positive for us. That we have been able to extend the brand into a multimedia opportunity from print to TV was very important because it encouraged us to add the third business segment — online."
Hefner’s vision led Playboy to the Internet far before it was fashionable.
"We were very influenced by the fact that by ’94, we were making a lot of money in television and therefore had demonstrated the ability to move the brand from one medium to another, which is not as easy to do as some might think," she says. "It’s not just that we were the first magazine to become a successful network. It’s that no other magazine has done it, even in categories where, as a result in the growth of the number of channels from cable and satellite, there are strong categories of programming, but they didn’t start from their magazine bases.
"For example, Music Television is not called Rolling Stone; it’s MTV," Hefner says. "And news television isn’t Time or Newsweek, it’s CNN. Even sports wasn’t Sports Illustrated, but ESPN, which then turned around and launched a magazine after the fact."
Those opportunities for new players caught Hefner’s attention.
"One of the reasons we got interested in the Internet space was that we had made the transition into electronic media," she says. "It also seemed to me that part of the potential appeal of the online world was that you wouldn’t have to edit for space or time, so you could really let the consumer be the editor in terms of what their interests were and what they wanted more information on."
Not only has Hefner given consumers the ability to become their own editors, she has also given up control of the magazine — virtually speaking, that is, following the launch of the company’s first-ever video game, "Playboy: The Mansion."
"Ten years ago, (video gaming) was a business for young boys," she says. "It is now very much a young adult market. And that, we think, plays to our sweet spot. So we got interested in moving into that as another category of entertainment and looked for a partner that we thought had a good creative vision for what the first Playboy game could be."
Hefner confesses she isn’t very good at the game. Then again, she runs the real thing and learned from the real "Hef."
"One of the most important lessons is, don’t compromise on the quality of what you’re doing," she says. "He’s a very strict taskmaster in that regard, as I think entrepreneurs often are. And I think that’s how companies sometimes get in trouble. When they grow so large that they can’t be run any more by their entrepreneurial founders, some of that passion for the quality of what you do and frankly, also a passion for the culture you’re creating, gets lost.
"Hopefully, I’ve been able to keep that from happening here. We’ve been able to grow by professionalizing how we make decisions and how we allocate capital and how we’ve developed strategies for growth. But at the same time, we’ve preserved the qualities of the pride in what we do and the respect for the individuals that make good people want to come and do their best work here."
And for that, Hefner just might make the magazine centerfold — of Fortune.
HOW TO REACH: Playboy Enterprises Inc., (312)751.8000 or www.playboy.com
