Frequent reader and correspondent Hugh Cook sends along this item from Mediaweek about the plummeting fortunes of my former employer:
“Big cuts are in store at Hugh Hefner’s Playboy, which is slashing its rate base a whopping 38 percent as the iconic men’s magazine battles advertising and circulation declines, Mediaweek has learned. Starting with the January 2010 issue, Playboy’s rate base will drop
to 1.5 million from 2.6 million. . . .The company has hinted at the possibility of more rate base cuts along with other big changes to the print edition, including an outright sale. And the writing has been on the wall for some time. Like other mass-circ magazines from Reader’s Digest to TV Guide, Playboy has whittled its rate base over the years. In 1971, it stood at 6 million. Playboy missed its 2.6 million-rate base by 146,734 copies, or 5.6 percent, for the first half of 2009, according to the Audit Bureau of Circulations. Its ad pages declined 33 percent to 275 this year through the November issue. . . . With the rate base cut, Playboy will lose its standing as the biggest circulation men’s lifestyle magazine by circulation. Now, the next biggest behind Playboy is Alpha Media’s Maxim, 
with a rate base of 2.5 million; and Rodale’s Men’s Health, 1.8 million.”
This is sad news, sort of, but hardly tragic. No single cause is to blame. Decades of poor business decisions and a refusal to evolve the editorial product faster than a glacial pace are factors, but there’s no way around the dominating fact that Playboy was once the Saudi Arabia of erotica, and now every man has a derrick in his yard. But there was once a time when Playboy rather daringly articulated the proposition that sex is fun, and those of us who happened to be somewhat confused ex-altar boys, and I’m sure others as well, appreciated the encouragement. Now the magazine seems determined to present sex mostly within a world of glittering debauchery. In some ways, it reflects the path of Hefner himself, that of a man who began his venture interested in and confused by sex, and concludes it as an almost cartoonish king of a silicon-enhanced Xanadu. Whatever–Hefner remade the world into a place that no longer has a place for him in it.
As a reader, collector and—for lack of a better term—something of a scholar of Playboy in particular and magazines in general, I’d like to add a few points.
For the past three decades, Playboy’s circulation decline has mirrored that of many mass circulation magazines, including Redbook, Woman’s Day, Family Circle, National Geographic and Outdoor Life. A few months ago, Reader’s Digest, another iconic magazine started by an entrepreneur, announced it would reduce its rate base from 8 million to 5.5 million, a decline of 32 percent. In its heyday, Reader Digest claimed a rate base of 17.75 million. So Playboy is not alone in this sea change.
In addition, Playboy’s 2.5 million subscriber file has become increasingly bloated with post-expiration copies, sponsored subscriptions, public-placement copies (i.e. verified circulation), and too many subs sold in sparsely populated C and D counties—folks that aren’t inclined to participate in the urban lifestyle depicted in the magazine and are of no interest to the media buyers of men’s toiletries, fashion and other products. To be fair to Playboy, though, all of its fellow men’s magazines make use of the less-than-desirable sponsored and public placement circulation. Worse yet, according to the Audit Bureau of Circulation, Maxim, Playboy’s number one competitor in terms of circulation, generates 22 percent of its subscription sales (compared to Playboy’s one percent) from tele-marketers, a source than most circulation directors will tell you renews poorly and is not considered by media buyers to be of same quality as subs ordered via direct request. I suspect that once Maxim burns through the subscriptions it inherited from its now defunct sister magazine Blender, it too will be considering a rate base reduction.
Given that Playboy’s mission is to be a guidebook to the urban male, I think that this recent rate base reduction is right on the money. Furthermore, I believe that the future will belong to magazines that can (1) generate positive net circulation revenue after deducting circulation acquisition costs and (2) provide advertisers with highly involved audiences, either dedicated to a specific lifestyle or hobby (e.g. Model Railroader). Those that don’t will have a much harder time surviving, given the diminishing ad dollars available to magazines.