LOS ANGELES -- Playboy Enterprises Inc. said Thursday it will convert its money-losing Playboy Channel cable subscription network to a pay-per-view service on Dec. 1.
Christie Hefner, chairman and chief executive officer, said the switch will take advantage of the growth potential of pay-per-view television.
The new service, called Playboy At Night, will continue to offer the present 10 hours per night of adult-oriented programming, starting at 8 p.m. Eastern time.
'We realized that pay-per-view presented us with the best distribution means because it provides consumers with a unique entertainment option when they want it,' said Hefner, speaking at a news conference in Los Angeles. 'What we're marketing is an impulse offering.'
Hefner said Playboy's pay-per-view business already has grown by 400 percent during the past 18 months. When it is launched, the audience with the pay-per-view capability will be at least 2.5 million homes, she said.
In systems that are not equipped for pay-per-view, Playboy At Night will be offered for a monthly fee.
Hefner said the switch to pay-per-view will eliminate the concern about children watching the service. She said local cable system operators often have been reluctant to offer the Playboy Channel, which was launched in 1982, because of such concerns.
The new service will offer 16 R-rated films per month and 16 of Playboy's original programs per month, such as 'Video Centerfolds' and comedy.
However, it will not present X-rated shows with explicit sex, Hefner said. With the widespread availability of X-rated home video, there is little potential for such offerings on cable TV, she said.
There are currently about 450,000 Playboy Channel subscribers. The service hit its peak about five years ago with 700,000 subscribers, Hefner said.
The new service will be based in Los Angeles under the direction of Michael Fleming, who has been named senior vice president and general manager.
Hefner also announced that Playboy will launch a new one-hour television show, 'Playboy Late Night,' in France, Italy and Spain for 26 weeks starting this fall.
'We have a global trademark,' Hefner said. 'The time is right for Playboy to expand as a major niche producer to the growing worldwide market for TV programming and videos.'
Playboy has reached agreements in principle with European television companies for the series, with details to be announced within 60 days.
Hefner said the magazine-format programs will be segmented by country. 'What's funny in Italy may not be funny in Spain,' Hefner said.
She said that the programs will not rely only on Playboy's library of programs but also will contain some locally produced segments.
Hefner said the amount of local programming should grow in time, similar to the growth of locally-produced material in the 12 foreign editions of Playboy magazine.
The new ventures are part of Playboy's Video Entertainment Group, which lost $4.9 million in the fiscal year ended June 30, 1988.
Hefner said the group's loss will be significantly less in the fiscal 1989 results, which have not yet been released. She also predicted that the group will be profitable in fiscal 1990.
For the nine months ended March 31, Playboy, based in Chicago, earned $2.2 million, or 23 cents a share, on revenues of $126.5 million.
