Christie Hefner

April 2008

Her father, Hugh Hefner, created Playboy magazine and made adult entertainment mainstream. Christie, the company’s chairman and CEO, took the globally recognized rabbit-head brand and gave it new life on TV and home entertainment, the Internet, mobile and consumer products. Now she’s overseeing construction of the Playboy Mansion Macao entertainment complex.

WS: Playboy is undoubtedly one of the world’s most recognized brands. How are you taking that well-known brand and bringing it to life in today’s multiplatform world?

HEFNER: We were an early believer in the potential of extending the brand and Playboy-style content into TV, and Playboy TV is 25 years old this year. In the same vein, we were the first magazine to go up on the web in 1994 and the first company that started to develop distribution of our content via mobile. We’ve been doing that for about six years. So it’s in our DNA. One of the ways we’ve done it successfully, because other people have talked about it and it’s not easy, is that we’ve worked hard to keep consistency across platforms in the positioning of the brand. We do this while allowing in each business for the creative and marketing people to find the unique ways to express the brand depending on how consumers use that medium. From a magazine perspective, some companies have struggled because they didn’t want to give up creative control from their magazine people to people schooled and skilled in a different medium. And consequently they end up in a situation where they’re struggling to find the right way to express the brand or they’re just trying to repurpose their content, since each medium has its own idiosyncrasies in terms of what consumers look for and how they interact with it.

WS: What opportunities has broadband offered Playboy content?

HEFNER: Roughly half the U.S. population now has broadband, and we are capitalizing on it to deliver content direct to the consumer off of our website. Indeed, our biggest revenue stream online is the sale of premium content, and a great deal of that is video. We’re also benefiting from significant growth (last year it was nearly 50 percent) in advertising online. We like the idea that in a three-screen world—your mobile device, your PC and your television—it still is going to come down to compelling content and brand. If a lot of that content is video, then the more than 2,000 hours of original Playboy video content that we have and the new content that we make every year is going to be increasingly valuable.

WS: What kind of advertisers have you been able to attract to your websites?

HEFNER: That’s been very important, because the print audience isn’t growing. Our focus is really to grow our total audience for Playboy in print and online, and we were really happy that last year we were able to do that by 9 percent and, not surprisingly, we were able to grow our total ad sales between print and online by 10 percent. That’s very much come from offering integrated solutions to advertisers. Some of the advertisers that leverage a multiplatform approach with us run the gamut from HBO to Sony PlayStation, from Jack Daniels to Coty and Kawasaki. What they recognize is what all the research has shown: that the best return on investment always comes from ad spending that has a mix of media. Television plays a role, print plays a role and online plays a role. Indeed, we are seeing something close to 90 percent now of the RFPs [requests for proposals] we get from advertisers are asking for both a print and online solution. They’re also frequently asking for an event component. So the other thing we’ve done in terms of your original question about the brand is to really pursue a high-tech, high-touch strategy. The high-tech side is what we’re doing in extending the brand and the content through digital, and that’s global. The high touch is what we’re doing in our consumer products and stores and location-based entertainment in places like Las Vegas and Macao.

WS: Your licensing business has been very successful, hasn’t it?

HEFNER: It has, and it’s of course very gratifying not just because it’s a high-margin business that doesn’t require investment of capital, but because it’s the purest way to measure the perceived value of the brand. [Companies] are paying us to use our brand equity to sell their products and to distinguish their products from other companies’. Last year, we did more than $800 million at retail in consumer products around the world; about 40 percent in Asia, about 40 percent in Europe and about 20 percent in the U.S. All of those regions are growing significantly, and we’re also expanding into Latin America and Africa. We’re very excited about the opportunities, from the mix of products to opening more outlets, expanding our geographic footprints, and taking the destination business that we started in Las Vegas and expanding that into other markets, where we can combine a variety of entertainment venues—casino, nightclub, restaurant, cool store, bar, etcetera—into one overall entertainment package that we do in partnership, usually with a hotel company.

WS: And you have one in development in Macao, right?

HEFNER: Yes, I was just there a few weeks ago. It’s under construction. It’s part of a huge development that’s being built that will have four hotels and a big casino, a million square feet of retail, five theaters and a television-and-film production facility. Our part of it will be this Playboy Mansion Macao entertainment center. It’s on track to open late next year.

WS: There were the Playboy Clubs years ago, and then those were shut down, and now you’re getting back into this business again?

HEFNER: We’re getting into location-based business, but it’s rather different. I am the person that closed the clubs. They were stand-alone, individual nightclubs that existed all over the world, whose appeal depended on booking big acts, which no longer play small venues. What we’re doing here is looking for larger opportunities where we can put together a mix of venues, and usually part of that is gaming. That changes the financial return and also the staying power of the properties. It’s really kind of our version of what Disney does with its theme parks, where you are bringing the brand to life.

WS: What further growth do you see for the Playboy international channels?

HEFNER: We continue to have strong growth with our channels overseas, and of course in part that’s because the growth of nonstandard television is more robust outside the U.S. because it’s a newer business. We have more than 30 channels around the world and we’re actually doing some exciting things. We’re in a joint venture with a channel in Latin America called Lifestyle TV and the “i” is dotted with the rabbit head. It’s a free ad-supported channel that takes all of the fashion, style, celebrity, gadgets and travel aspects of the Playboy brand and creates compelling programming around that concept. We launched it just a few months ago, but we are already in six countries and have more than a million subscribers, and we are excited about that opportunity.

WS: Do you see that going beyond Latin America?

HEFNER: I do. It’s become kind of a small planet in many ways. In some ways that’s because of the common threats that we face, like climate change and terrorism. But in some ways we have common interests, in the good life, whether that’s food and wine or fashion or hot clubs or travel. Those are universal interests and Playboy is a global brand, so we are going to first focus on building our success in Latin America, but I’m definitely interested in exploring possibilities elsewhere.

WS: You have said that Playboy magazine has always believed that women can be both admired and desired.

HEFNER: I’ve believed this for many years, and what I find so intriguing is that it seems to be an entirely internalized set of beliefs among today’s young women. We see that in the popularity of Playboy products with young women. Our demographic target for our consumer products is 18- to 34-year-old consumers. In fact, 75 percent of our products are women’s products—fashion, jewelry, handbags, watches, etcetera. Another manifestation, our TV show, The Girls Next Door, is not only [one of] the top-rated shows on the E! channel, but actually has a young female demo and generally is the most popular show among young women on cable when it airs. So that basic idea of a post–feminist revolution, post–sexual revolution mentality of “I expect to have a career. I expect to be treated fairly. I expect to be treated seriously. I expect to be with a man who is going to share responsibilities. And I also want to dress sexy and have fun when I go out,” seems very much to be the point of view of the majority of young women today. I think it’s a healthy perspective and in a self-interested way a very good point of view from Playboy’s perspective.

WS: The company has a history of championing diversity, human rights, civil liberties. Why has this always been important to the company and to you personally?

HEFNER: Well, it was important to the company before I started here, so I think that really my father is the person who deserves the credit for having those values and early on, first writing about these issues in the pages of the magazine, and then starting the Playboy Foundation to, as he said at the time, put his money where his mouth is. Before I even joined the company, it was Playboy that gave initial funding to Masters and Johnson for their research; initial funding to the American Civil Liberties Union to start the Women’s Rights Project, which was first run by Ruth Bader Ginsburg; and the Sexual Privacy Project, which then became known as the Gay Rights Project. Those were strongly held beliefs of my father and part of what set Playboy apart from the beginning [was that] it was a great entertainment magazine and a great service-and-lifestyle magazine, but it was also a magazine that had an intellectual set of values underpinning it in terms of its beliefs in social justice and equal rights and personal freedom.