Playboy Drops DVDs for Online Video

    October 16, 2008
    Chris Crum

PlayboyIf this isn’t a shining example that online video is taking over, I don’t know what is. Playboy is going so far as to completely shut down their DVD business to move all of their video content to the Internet.

"Unlike other companies that began in print, we have profitable television, online and mobile businesses, which have domestic and international growth potential," said CEO Christine Hefner.

A couple weeks ago it was reported that online video viewing had doubled over the past year. I suspect it is continuing to grow, as just about every day we get more news about happenings in online video, whether that be newly formed partnerships or online videos sites making improvements to their services.

All signs point to the future of video being online. Playboy knows this and is cutting a business, eliminating 80 jobs and costing the company $2 million in restructuring costs. According to Reuters, they will even take an additional $4 million hit from archival materials. That’s $6 million. That’s ok with Playboy though, because they anticipate that they will save as much as $12 million a year by going strictly online and eliminating DVDs. Gina Keating with Reuters writes:

She said the company was acting to meet the challenges of increased competition for consumers’ attention, the migration of advertisers to other platforms, and higher costs of paper, ink and other expenses.

The company will continue to deliver more content digitally, she said in the memo, as it exits the DVD business in phases over a few months to concentrate on selling that content online. Hefner said of the 80 jobs being eliminated, 25 were already open.

Something tells me one day we might be looking back upon Playboy as a pioneer in making the transition from DVD to online. The question is, when will this be commonplace? When will the movie studios phase out DVDs? I think we still have a while before that happens. Set-top boxes and/or PC-to-TV hook-ups will have to reach the mainstream.