Ops' Service Trots To Hot

Playboy Entertainment Group and New Frontier Media could soon be sharing the explicit adult video-on-demand boudoir.

Pay-per-view and VOD purveyor In Demand is planning to acquire "hot" adult PPV movie titles for distribution on its on-demand platform, in an effort to cut its own slice of the sizzling explicit adult-PPV movie category.

Sources close to In Demand said its board of directors — consisting of representatives from Comcast Corp., Time Warner Inc. and Cox Communications — voted to allow In Demand to buy and distribute movies and events via VOD that are edited more liberally than traditional adult cable fare from such networks as Playboy TV.

In Demand currently offers an adult-oriented linear PPV channel dubbed Hot Choice, which offers cable-edited adult movies, events and specials that aren't much more sexually explicit than what's offered on pay services like Cinemax and Showtime.

In Demand executives would not comment on the matter. Comcast, Cox and Time Warner executives could not be reached for comment at press time.

In recent years, operators have slowly and quietly moved toward offering more explicit adult content, which generates as much as 50 to 100% more PPV buys as traditional adult cable programming, according to operators.

While such fare is still considered taboo for operators to talk about — or market — the adult PPV business has nevertheless been one of the industry's few consistent revenue generators.

In 2002 — the last time adult PPV revenue was reported — the genre produced $609 million, nearly double that of PPV events and second only to the $1.47 billion generated by PPV movies.

But operators keep 60% to 80% of all adult pay-per-view revenue, compared with their barely 50% piece of the hit-movie pie.

And with suggested retail prices ranging from $6.95 to $12.95 for a three- to six-hour block of programming — versus $3.95 or $4.95 for a PPV movie — adult content is a major revenue generator for operators.

Every major MSO offers some form of adult PPV programming, and most offer the more explicit adult content.

Thus far Playboy, with several Spice-branded networks, and New Frontier's TEN-branded PPV and VOD services have been the biggest players in the explicit adult market.

TEN serves more than 5 million digital VOD homes, while Playboy reaches around 2 million.

One executive close to Playboy Entertainment Group said he was "surprised" to hear of In Demand's move into the adult category.

"I'm surprised that cable feels the need to be involved so directly when they have other viable options such as Playboy and Spice," he said.

There's also an image issue. Operators are keenly aware of the potential bad publicity that could arise from religious or conservative groups if systems were to aggressively promote their adult PPV offerings.

The issue of obscenity is particularly worrisome for the industry, in light of the fallout from the Janet Jackson breast-bearing incident at the halftime show of Super Bowl XXXVIII on Feb. 1.

That spotlight could shine more intently on top MSO Comcast, which recently made a bid to buy family-oriented The Walt Disney Co.

One source close to Comcast said the MSO has offered adult programming on PPV and VOD platforms but not the more explicit titles.

But, In Demand isn't producing the programming, merely licensing it from outside studios.

"Comcast has been in this business for a long time — all of the MSOs have, except for Adelphia, the source said.

R. Thomas Umstead

R. Thomas Umstead serves as senior content producer, programming for Multichannel News, Broadcasting + Cable and Next TV. During his more than 30-year career as a print and online journalist, Umstead has written articles on a variety of subjects ranging from TV technology, marketing and sports production to content distribution and development. He has provided expert commentary on television issues and trends for such TV, print, radio and streaming outlets as Fox News, CNBC, the Today show, USA Today, The New York Times and National Public Radio. Umstead has also filmed, produced and edited more than 100 original video interviews, profiles and news reports featuring key cable television executives as well as entertainers and celebrity personalities.