So today Playboy Enterprises reported a $13.7 million dollar loss for the first quarter of 2009. CEO Jerome Kern, on an earnings call, reported that revenues actually fell by $17 million, but they were able to offset some of this by cutting a quarter of its workforce, closing its DVD business unit and merging its publishing and online New York offices and moving to Chicago.

The revenue decline was in every business unit across the board, and according to Folio, Kern has a creative new strategy to turn the ship around: charge more for fewer issues of Playboy magazine! The publisher says that they are going to combine monthly issues to produce fewer per year, starting with July and August of this year, and increase their cover and subscription prices.

With more and more advertising dollars moving online, print advertising is reaching a crisis point. Playboy says they expect to report a second quarter 39% decrease in ad sales revenue from the same period in 2008. And yet, Kern says, print is still a "key focus of attention" for the company, though with "radical changes".

It's tough to see what kind of "radical changes" Playboy can institute into their print business that could stop the bleeding. Print still represents more than half of the company's revenue stream, but the writing is on the wall: print is a dying medium. Playboy may be better served focusing on their online offering. Though also experiencing heavy losses, (falling 40% from same time last year), a rethinking of their format, content and revenue model could poise the the company to take advantage of the advertising dollars that are currently flowing into online, and will continue to do so during our economic recovery - which is hopefully imminent!

Did I mention that Playboy reported a year-end net loss of $156.2 million for 2008? If Playboy doesn't do something, the viability of the company as a stand-alone business is going to be in jeopardy, (Kern has already said they would be "open to discussion" regarding the sale of the company). Hef might even have to cut a couple of his girlfriends and slash his Viagra budget.