http://www.nypost.com/business/38078.htm
January 9, 2005 -- BUSINESS EXCLUSIVE
Penny for your (dirty) thoughts?
Columbia House, famous for its "12 CDs for a penny" record clubs, will launch its own adult video club with Playboy Entertainment at the end of this month. The service, called Hush, will sell pornography through direct mail and a Web site.
While 50-year-old Columbia House is eager to cash in on the $12 billion porn business, officials are pretty hush hush about Hush.
"This will be a separate subsidiary," said Jim Litwak, senior vice president of marketing at Columbia House. "It will be completely separate from Columbia House, and will not be marketed to current members. We are not using Columbia House at all, and are not talking to existing members; this is a separate business and deal."
Columbia House, the nation's largest direct distributor of DVDs and home video, will handle distribution, while Playboy, which has an adult direct-mail list "in the millions," according to Litwak, will handle marketing.
Litwak added that his company estimates that total adult video sell-through and rentals total $5 billion a year.
He said Hush can grab a significant amount of the marketplace because of Playboy's wide reach and Columbia's direct distribution methods. The club would work similarly to the company's record groups subscribers would select from a monthly catalog of titles.
Executives from Columbia House were roaming the aisles of the AVN Adult Entertainment Expo in Las Vegas last week, meeting with producers and stressing that Hush will distribute adult content from other publishers besides Playboy.
Hush also insisted that it is starting with no members and is not piggybacking on existing Columbia House subscribers. In the words of one company executive, it will be a "slow build."
Last June, Columbia House struck a quiet deal with Playboy to add about 150 of its more "tasteful" product line to the Columbia House DVD Club, and it has also been test marketing adult titles through its Canadian subsidiary. Litwak said very few club members have complained.
But considering the outcry over Janet Jackson and Nicolette Sheridan, Columbia House needs to tread carefully, said entertainment analyst Dennis McAlpine of McAlpine Associates.
"Columbia House might bring in some negatives because of the association," he said. "It's more risky for Columbia House than for Playboy."
It may be risky not to get into the flesh business, however.
Traditional discount-book and record clubs like Columbia House and Time Warner's Book of the Month Club, which once enjoyed huge market shares, have been hard hit by the introduction of discount Internet distributors, such as Amazon.com, and eBay. Adult entertainment, meanwhile, has grown exponentially.
Among the recipients of Hush marketing dollars, Litwak said, will be Howard Stern, with Hush spon soring contests on Stern's syndi cated radio show. Hush will also be promoted through direct mail and through ads in adult magazines, Litwak added.
Columbia House was launched in 1955. It has over 8.5 million offline and online club members in the United States and Canada who pick from some 5,000 DVDs and 9,000 music titles through its various entertainment clubs.
In 2002, the company was purchased by merchant banker Blackstone Capital Partners, with former operating partners Sony Music Entertainment and Warner Music still owning minority stakes.
January 9, 2005 -- BUSINESS EXCLUSIVE
Penny for your (dirty) thoughts?
Columbia House, famous for its "12 CDs for a penny" record clubs, will launch its own adult video club with Playboy Entertainment at the end of this month. The service, called Hush, will sell pornography through direct mail and a Web site.
While 50-year-old Columbia House is eager to cash in on the $12 billion porn business, officials are pretty hush hush about Hush.
"This will be a separate subsidiary," said Jim Litwak, senior vice president of marketing at Columbia House. "It will be completely separate from Columbia House, and will not be marketed to current members. We are not using Columbia House at all, and are not talking to existing members; this is a separate business and deal."
Columbia House, the nation's largest direct distributor of DVDs and home video, will handle distribution, while Playboy, which has an adult direct-mail list "in the millions," according to Litwak, will handle marketing.
Litwak added that his company estimates that total adult video sell-through and rentals total $5 billion a year.
He said Hush can grab a significant amount of the marketplace because of Playboy's wide reach and Columbia's direct distribution methods. The club would work similarly to the company's record groups subscribers would select from a monthly catalog of titles.
Executives from Columbia House were roaming the aisles of the AVN Adult Entertainment Expo in Las Vegas last week, meeting with producers and stressing that Hush will distribute adult content from other publishers besides Playboy.
Hush also insisted that it is starting with no members and is not piggybacking on existing Columbia House subscribers. In the words of one company executive, it will be a "slow build."
Last June, Columbia House struck a quiet deal with Playboy to add about 150 of its more "tasteful" product line to the Columbia House DVD Club, and it has also been test marketing adult titles through its Canadian subsidiary. Litwak said very few club members have complained.
But considering the outcry over Janet Jackson and Nicolette Sheridan, Columbia House needs to tread carefully, said entertainment analyst Dennis McAlpine of McAlpine Associates.
"Columbia House might bring in some negatives because of the association," he said. "It's more risky for Columbia House than for Playboy."
It may be risky not to get into the flesh business, however.
Traditional discount-book and record clubs like Columbia House and Time Warner's Book of the Month Club, which once enjoyed huge market shares, have been hard hit by the introduction of discount Internet distributors, such as Amazon.com, and eBay. Adult entertainment, meanwhile, has grown exponentially.
Among the recipients of Hush marketing dollars, Litwak said, will be Howard Stern, with Hush spon soring contests on Stern's syndi cated radio show. Hush will also be promoted through direct mail and through ads in adult magazines, Litwak added.
Columbia House was launched in 1955. It has over 8.5 million offline and online club members in the United States and Canada who pick from some 5,000 DVDs and 9,000 music titles through its various entertainment clubs.
In 2002, the company was purchased by merchant banker Blackstone Capital Partners, with former operating partners Sony Music Entertainment and Warner Music still owning minority stakes.
