An empire built on female nakedness went the way of all flesh last week when Penthouse, the magazine that once epitomised the adolescent male fantasy, accepted its mortality and filed for bankruptcy.
The demise of a magazine that turned its medallioned founder, Bob Guccione, into an icon of the swinging Seventies had been expected for some time. Though it had yet to reach middle age — the magazine was founded in 1969 as a raunchier alternative to Playboy — Penthouse could not keep up with a new generation of competitors.
Trapped between an explosion of hardcore images over the Internet, in video stores and on late-night cable television, and the willingness of celebrities to appear in skimpy clothing in a new crop of men’s magazines, Penthouse was eventually undone.
In the past decade its revenue fell by 53% to $53,8-million. Its circulation, five million at its peak, fell to 530 000 last December, and on August 11, the magazine’s publisher, General Media, filed for Chapter 11 bankruptcy protection.
Lawyers were in a United States bankruptcy court in New York again last week as the company took the first steps to reorganise itself and renegotiate $50-million in debt.
The bankruptcy proceedings follow several months of turmoil at Penthouse. The company’s auditor stepped down in May after a dispute over financial statements and the magazine is under investigation by US financial regulators.
The demise of the Penthouse phenomenon was brought home even more graphically when the company was threatened with eviction from its corporate headquarters.
Meanwhile, Guccione came within a whisker of losing his mansion. Late last month a mortgage company threatened foreclosure unless it received a $15-million payment. The 45-room estate is one of the largest privately owned homes in Manhattan.
Last week the man charged with sorting out the magazine’s finances, T Scott Avila, blamed its failure equally on the emergence of alternative purveyors of pornography and debt, which piled up over the years because of Guccione’s predilection for the opulent and his ruinous investment in an Atlantic City casino.
”The bankruptcy proceedings were precipitated by two events. Most gentlemen’s magazines of this nature have experienced a decline over the last few years,” said Avila. ”You can look to the Internet and other media forms for the same type of content.”
The magazine skipped three issues earlier this year — reportedly because the company was unable to pay its printers — and employees last month were forced to swallow a 75% cut in their salaries.
But it had lost its way long ago, analysts said, unable to navigate the mores of a post-Aids, post-feminist age. It also proved inadequate to the challenges posed by new technology, failing to move into the new markets opened up by the Internet, DVDs and videos.
”What he [Guccione] hasn’t done is go into cable TV or the Internet in a big way — not as a market leader,” said David Sullivan, who launched his softcore pornography empire in Britain in the 1970s.
Penthouse, envisaged from the start as a more explicit alternative to Playboy, responded to the spread of hardcore pornography over the Net by resorting to almost anatomical images. True to its past reputation for being the first — with pictures of erect penises and threesomes — Penthouse began publishing scenes in extreme close-up.
However, the tactic, intended to turn on readers, turned off the tobacco and alcohol companies that were among its most lucrative advertisers.
Rivals said the magazine looked like a medical manual.
And, despite its efforts, Penthouse could never hope to compete with the largely unregulated images on the Net. Some were available for free and even paid-for sites were more convenient for consumers of pornography, sparing them the embarrassment of leafing through the top racks at a magazine stand.
In the meantime, Penthouse suffered with the emergence of new magazines such as Maxim, Stuff and FHM. The new stable had no compunction about showing lots of skin. Celebrities such as Christina Aguilera didn’t either.
That meant that the magazines could capitalise on glamour shots without labouring under the stigma of pornography.
Penthouse‘s failure to read the market was compounded by Guccione’s taste for excess and some spectacular business flops. Over the years he has seen the launch and demise of Viva, intended as a Playboy for women but bought mainly by gays, as well as titles about science and computers.
At his Manhattan mansion he spent $200-million on works by Renoir and Picasso, and he indulged his whims even further with costly ventures into filmmaking, producing biopics on Caligula and Catherine the Great.
Last week’s events brought the empire Guccione founded to its lowest point.
Avila said he believed that magazines such as Penthouse and Playboy had not been made redundant by videos or the Net. ”If you look at men’s magazines today with a little softer content, there is a huge future,” he said.
But Guccione, never a man for softer content, appears to have reconciled himself to the fact that his time is up. In an interview last year, he said: ”There is no future for adult business in mass market magazines.”
For a man who took a sledgehammer to the concept of sexual innuendo, it comes as no surprise that Guccione chose 1969 for Penthouse magazine’s American debut.
The soft-porn publishing luminary wanted to bring sex down a notch — boldly going where Hugh Hefner’s Playboy had not yet dared to tread.
For his first marketing campaign, he took the image of Playboy‘s bunny ears and placed them at the end of a gun barrel.
Guccione showed an apparent indifference to public decency by sending unsolicited copies of the first issue through the post — and was arrested soon afterwards. With the magazine’s world-famous rival espousing an upmarket lifestyle, Penthouse set out to be a downmarket alternative.
At the height of its popularity in the 1970s and 1980s, it hit a circulation peak of 4,7-million copies a month and raked in annual profits of more than $20-million. — Â