Case Study: The original American lad mag, in a bid to increase revenue and ad sales, is now offering its content in digital form.In the good old days, Playboy magazines used to arrive on doorsteps in brown paper wrapping.
The issues were then promptly dispersed to far off, hidden locations in homes: shoved underneath mattresses, wedged behind the toolbox in the garage or stacked neatly in the cabinet beneath the bathroom sink.
But now, at last, Playboy is also delivered right where a magazine that features naked ladies (and yes, of course, those articles) belongs: on your computer.
As of the October issue, Playboy magazine is now being delivered digitally via the Zinio Reader, a product of the San Francisco-based digital publishing company Zinio.
Together the two companies hope to help Playboy deliver their magazine more efficiently, create new revenue streams and, perhaps most importantly, devise a cost-efficient way to boost those all-important circulation numbers, which dictate advertising rates.
Playboy subscribers will be given the option to receive the magazine in digital form for an additional $19.97 for 12 issues.
The Zinio Reader offers searchability, interactivity and multimedia opportunities, such as video. (Ad Age includes videos of the commercials they review in each digital issue, for example.) Zinio creates Playboy's digital files by converting PDF documents into the DjVu file format, which was developed by partner company LizardTech.
The Zinio Reader can also display gatefold—particularly important for Playboy and its famous signature centerfold. There is also a browser-based version called Zinio Express, which is more useful for users purchasing single issues rather than regular subscriptions.
After a user subscribes and downloads the Reader software, a pop-up window and e-mail prompts users to automatically download subscriptions to their desktop as each issue becomes available.
The downloaded version allows for both online and offline use, a quality that has made it attractive to the business traveler.
In fact, historically it's been used mainly by tech and business magazines, though the product has gained mainstream popularity in the past year, according to Dave Zinman, Senior Vice-President of Marketing and Product Management.
"We started out selling to tech publishers," says Zinman. "Their audience was really ready to experiment with digital. But the mainstream consumer magazine readers and publishers weren't ready, but that's really beginning to change in a big way."
Lending credence to Zinman's statement are companies like UK-based publishing house Hachette Filipacchi, which announced recently they're converting all their magazines to digital by early 2006.
"Our company has always been a pioneer in utilizing new media," said Phyllis Rotunno, Vice-President of Subscription Circulation at Playboy.
They recently tested the waters with a digital edition of their "Lingerie" special edition in May, and claimed a double digit increase in that publication's subscription circulation, as well as strong sales of single issues.
(Playboy declined to release circulation numbers for any editions discussed, but Playboy's Web site states the magazine's circulation is more than three million copies in the United States and 4.5 million worldwide.)
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"We will always have loyal subscribers and newsstand buyers who like to receive Playboy in their homes each month and hold it in their hands, but there is a new generation of readers emerging and advertising dollars are following. So expanding our online offerings makes sense," says Rotunno.
Next Page: The digital conversion process explained.
Playboy spent over a year researching digital publishing vendors until they landed on Zinio, a company founded in 2000 that launched their first digital title in 2002 and currently works with 300 titles.
Within Playboy, Rotunno leverages both the subscription circulation department and the print production team in order to deliver the necessary information and files to Zinio.
The print to digital conversion is fairly simple, according to Zinman.
Once Playboy delivers the files they send to their printer, the entire process using their proprietary software only takes a few hours, and is manned by just one person.
The converted file is then matched up with a subscribers' list. Zinio has also created a fulfillment integration technology, which has allowed them to integrate with the major fulfillment houses, merging a list of both digital and print subscribers, a service which Zinman claims is unique to the market.
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Zinio also sources subscribers for Playboy, via Zinio global network sites, a chain of ecommerce sites.
The sites are organized by country and subject matter, and use the local language and currency. As Playboy releases an issue, they can sell it anywhere in the world, and have it delivered instantly.
"The experience most people have buying a copy across borders is that it gets very expensive and it takes a long time to get there in print," says Zinman. "So all of a sudden any publisher has a global marketplace instead of a regional marketplace."
And that also impacts a magazine's rate base, which is traditionally the bread and butter for magazines.
"You can declare your digital circulation in your rate base in your publisher's statement when you file with the ABC [Audit Bureau of Circulations]," says Zinman.
"So when the advertiser pays for a million sets of eyeballs, maybe ten or fifty thousand of those are actually digital subscribers. They're just paying in effect for all the eyeballs. They don't make a distinction."
"It's as valuable as print," says Zinman, "but costs a lot less."
There are also new ways to integrate advertising into the digital editions.
"Magazines can sell premium placements in the digital copy by giving advertisers the option to add interactivity or multimedia to their ads," says Zinman, citing the June 20 edition of Business Week, which went to a million people in digital form and featured premium multimedia advertising.
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"We're creating new revenue streams," Zinman said. "It's really compelling. Especially in the magazine industry where so much of the business is flat, year over year. To create a new revenue stream for a publisher really motivates them to pay attention. I think in the case of Playboy, that's exactly what happened."
He adds, "Each publisher has to commit to changing the content as opposed to just replicating the exact print copy which is very easy to do. And they only do that after they sign up enough subscribers where it becomes compelling for them to create a new experience for that subscriber base."
Playboy intends to take advantage of the interactivity opportunities. "In the future, we will offer advertisers the opportunity to include rich media elements such as video or audio clips or even their TV commercials along with their ads," says Rotunno.
Lest the business get in the way of the content, Rotunno adds, "One of the keys to our digital success will be using the full capabilities of multimedia to add value to the reading experience. Our editorial team is committed to embracing those opportunities."
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