Playboy Unveils 3-D Centerfold to Freshen Its Aging Brand

After criticism that Playboy magazine has grown stale over the years, publisher Playboy Enterprises (PLA) has been dusting off the cobwebs from its brand -- and it's starting to pay off.

The latest example is this week's announcement that the June issue, scheduled to hit newsstands Friday, will include a 3-D centerfold of Playmate of the Year Hope Dworaczyk. The best-known men's magazine is willing to take risks, says Jimmy Jellinek, the editorial director of the magazine and Playboy.com, citing the recent Marge Simpson centerfold.

3-D Doesn't Come Cheap

And 3-D qualifies as a risk. Jellinek tells DailyFinance that the 3-D centerfold of Hope Dworaczyk wasn't cheap, although he won't specify the cost. "The glasses themselves have to be bound" into each issue, he says. "There are definitely additive costs. Luckily, we found a great partner in HBO."

The Time Warner (TWX) pay cable channel used the 3-D glasses to promote its show True Blood. Hefner told the Associated Press that the company was hoping to capitalize on the popularity of 3-D movies such as Avatar and How to Train Your Dragon.

"The goal is to create newsstand events," Jellinek says. "Any editor worth their salts should be doing the same thing in this newsstand environment."

Playboy magazine's circulation has plunged from 3.15 million in 2006 to 1.5 million today, the Associated Press notes. But all the changes could help reverse that trend.

Advertising Ready for Turnaround

Under CEO Scott Flanders, Hefner's empire outsourced most business operations of Playboy magazine to American Media Inc., publisher of The Star and Men's Fitness. Playboy Enterprises, which has long been seen as an acquisition target, expects to continue reducing headcount, albeit at a lower rate than before, given the restructurings already undertaken. Advertising pages are expected to grow more than 50% in the current quarter as AMI attracts new advertisers.

More good news? Playboy Enterprises recently reported a loss of $1 million, or 3 cents per share -- a huge improvement from a loss of $13.7 million, or 41 cents, a year earlier.

Shares of the Chicago-based company have soared 35% this year as investors bet that initiatives -- such as the 3-D centerfold and a porn-free website, called Smoking Jacket, that's "safe" for readers to read at their office -- will pay off. The site, named after founder Hugh Hefner's favorite leisure wear, is expected to debut in the coming months.