Penthouse Media Group Inc. has acquired social network company Various, Inc., a move that includes a portfolio of online dating sites with a combined 250 million members since their founding and 1.2 million current paying subscribers. This acquisition comes as both Penthouse and Playboy are diversifying their businesses in response to the proliferation of online adult content.

Diversification Amidst Industry Shifts

The adult magazine industry, including long-standing brands like Penthouse and Playboy, is undergoing significant changes. The rise of online pornography has made traditional print magazines seem like "throwbacks to more innocent times," according to Jennifer Ordoñez, reporting for Newsweek. David Miller, an industry analyst and managing director at Los Angeles-based Sanders Morris Harris Group, noted that adult content is widely available for free over the internet, posing a challenge to established adult media companies.

In response to these market shifts, Penthouse and Playboy have been actively working to diversify and reinvent themselves. Penthouse's acquisition of Various, Inc. in December is a notable example of this strategy. The company's subsidiaries now include a number of online dating sites, such as BigChurch.com, which promotes "Bringing people together in love and faith." BigChurch.com features a quote from the Old Testament and user testimonials, presenting a contrast to its corporate parent's traditional image.

Playboy Enterprises, Inc. also reported a first-quarter earnings loss of $3.1 million, with declining revenue across nearly all divisions. The company has repositioned itself as a lifestyle business, focusing on revenue from casinos, clothing, and other products branded with its bunny icon, rather than solely on its media holdings. Playboy's Art Director, Tom Staebler, indicated that the magazine is attempting to become "softer," aiming to compete with publications like Esquire and Gentleman's Quarterly. Playboy Enterprises is also increasing its focus on video cassettes.

The challenges faced by these magazines are not new. In 1986, fundamentalist groups persuaded an estimated 17,000 stores to remove Playboy and Penthouse from their racks. This led Playboy to cut ad rates by 17% in July of that year and report a loss of nearly 700,000 in circulation. At that time, Playboy was already trying to reduce the explicit content in its magazine, while Penthouse was becoming more explicit and diversifying into areas such as selling powdered milk in the Arab world and publishing a magazine for military officers about biological warfare.

Penthouse's Evolution and Business Strategy

Penthouse, founded in London by American Bob Guccione in March 1965, launched its American edition in September 1969. Guccione aimed to challenge Playboy with a more provocative editorial line and more revealing nude photography. The magazine's symbol was a skeleton key, or three keys in some applications. The UK edition of Penthouse ceased publication in 1999, with a brief revival attempt in 2001. The U.S. edition experimented with hardcore content between 1997 and 2004. Under new ownership in 2005, it returned to softcore content, but its publication frequency diminished, with five issues in 2020. The last regular issue of the U.S. edition appeared in 2023. Los Angeles-based Penthouse World Media, the current owner of the masthead, stated a year later that it would return, and in early 2026, repeated that "plans for a return to print are still in the works."

The acquisition of Various, Inc. by Penthouse Media Group Inc. in December represents a significant step in Penthouse's current diversification strategy. The social network behemoth's subsidiaries, including online dating sites, collectively boast 250 million members since their inception and 1.2 million current subscribers who pay for content. This move positions Penthouse to tap into new revenue streams beyond its traditional print media.

Market Dynamics and Competition

The competition between Penthouse and Playboy has a long history, often described as an "erotic battle royale." Playboy, founded in 1953 by Hugh Hefner, was the leading men's magazine globally with a circulation of over 50,000. Penthouse, under Bob Guccione, directly targeted Playboy, using a "Tortoise vs. the Hare" marketing strategy. Penthouse's international popularity grew, and by the mid-1970s, it became the biggest selling magazine in British publishing history, subsequently competing with Playboy in the United States.

The current market environment, characterized by a shrinking target audience of young men and a preference for more explicit content on cable TV and video cassettes, continues to drive the need for diversification. Both companies are adapting their business models to remain relevant and financially viable in a rapidly changing media landscape.

Key Facts

  • Penthouse Media Group Inc. acquired social network company Various, Inc. in December.
  • Various, Inc. subsidiaries include online dating sites with 250 million members and 1.2 million current paying subscribers.
  • Playboy Enterprises, Inc. reported a first-quarter loss of $3.1 million and is focusing on lifestyle branding, casinos, and clothing.
  • Penthouse was founded in London in March 1965 by Bob Guccione, with the U.S. edition launching in September 1969.
  • In 1986, an estimated 17,000 stores dropped Playboy and Penthouse due to pressure from fundamentalist groups.
  • The U.S. edition of Penthouse last appeared as a regular issue in 2023, with current owner Penthouse World Media stating plans for a return to print.