[ot?] Christie Hefner: How Playboy Protects Its Assets

February 7, 2006
Christie Hefner: How Playboy Protects Its Assets
By Elizabeth Bennett
Playboy's CEO discusses how the media company protects 50 million
photographs, 11 million art images and other content.




With more than 53 years of multimedia content under its belt, Playboy
Enterprises takes content management and rights management very seriously.

Developing the best systems to manage all those photos, videos, television
footage and text is top priority for Playboy chairman and chief executive
Christie Hefner, who has been at the helm of the Chicago-based
entertainment company since 1988.

Hefner, 53, has spent the better part of her life working at Playboy,
having joined the company in 1975. She became president in 1982 and is
considered a digital pioneer for bringing Playboy.com online in 1994; it
was the first national magazine to set up shop on the Internet.

For the first nine months of 2005, Playboy Enterprises reported operating
income of $23.6 million on revenue of $247 million.


Baseline associate editor Elizabeth Bennett recently interviewed Hefner to
find out how Playboy tackles the challenges of digital rights and content
management.

What have you learned about managing information technology during your 30
years at Playboy?

The role of information technology has profoundly changed in our company,
and, not coincidentally, my attitude about it has profoundly changed. In
the early '80s, the question was how to manage technology effectively as a
cost center, what vendors you chose and how often you bought software
packages versus trying to build your own.

We took an official skunk works approach [in the 1980s]. There was one
person in the art department and one person in administrative rights who
were interested and tech savvy. And so, in effect, I funded them. I let
them buy computers and experiment with different kinds of software that
were being developed to help change the way the whole editing process was
being designed for publishing.

We were able to develop the right systems for Playboy and then, in effect,
seduce people by being able to show them what it could do for them, as
opposed to ordering people to change the way we produce the magazine.

What is Playboy's biggest information-technology challenge?

Moving from seeing information technology as a corporate cost center to
embracing it as a business driver, staffing the function that way and then
using technology to translate all of our content?video, audio, print?into
digital content so that it can then be accessible and repurposed and
re-presented in all the different media.

How do you protect your digital rights? We're pretty aggressive, but that
comes out of many years of being aggressive about our trademarks. We have
licensing agreements all around the world for physical products, so we know
what it's like to protect a valuable trademark. Obviously that's true in
terms of intellectual property rights as well.

We have full-time employees who search the Web looking for misuse or theft
of our material. We're unapologetically litigious, and have won some
important lawsuits in terms of precedent as well as in terms of shutting
people down. We work with all the logical trade groups for advancing legal
protections around the world and for using technology to protect ourselves.

I don't think there's any one answer. As in the physical world, you can't
aspire to a situation where no one is ripping you off. Because if no one's
ripping you off, it means that you no longer have a commercially viable
product. The goal is to minimize how much market share the pirates have?and
I think we're pretty good at doing it.

What are the most important systems at your company?

Certainly digital rights management and digital asset management are at the
top of the list for all the obvious reasons. We have over 50 million
photographs, 11 million art images and I can't even count how many pages of
text. Last time I looked, we had over 2,500 hours of Playboy-style TV and
film content. So it's quite an asset.

And there's an increasing consumer interest in accessing short amounts of
content. So a 90-minute movie or a 60-minute TV show is not infinite, but
you can divide it up into different pieces. Organizing that content in a
way that's accessible would have to be at the top of the list.

What content management and digital rights management technology does
Playboy use?


Our content management tools are all currently designed and built in-house,
but we're in the process of evaluating vendors for an enterprise system
that will allow us more flexibility and shorter time to market. We use
Microsoft's DRM for Windows Media files and Real's Helix Server for Real
Media files [for digital rights management].

What were the challenges in deploying the technologies?

Our biggest challenge so far has been in finding qualified people to help
us build the infrastructure. The kinds of projects we're taking on are
relatively innovative and experts can be difficult to find, particularly
with respect to distribution of content to mobile devices and the home. For
example, we recently launched a subscription-based "video podcast"
offering?at the time we released it we were the only company offering this
type of service, so it was a challenge to find people with that expertise.

Has the technology you deployed been successful?

Our technology investments have so far been great successes. They've
allowed us to bring products to market much more quickly and cost
effectively, and to leverage new opportunities by being more responsive to
new platforms and devices. It's been a great challenge to recast Playboy as
a technology innovator, but it has already begun to pay fantastic
dividends.

Where are you in the process of having a single digital rights management
and single content management system?

No company has yet figured out exactly how to do it right. We're all trying
to learn as we go. We have a lot of ground that we think we're going to
cover this year in terms of both how we have organized the material and how
we can allow the consumer to access it. One component of this is what we
call the Media Mall, which is our direct-to-consumer video-on-demand
interface, and we will launch that in the first half of this year.

As for the digital rights management and digital asset management
[systems], we'll have versions of those operating this year. But to me,
it's not like you build a house and then maybe in 10 years, you redecorate.
It's going to be a constant process of not just adding content and putting
in the right kinds of meta tags to search that content, but adding
functionality. And one of our goals is to have a flexible architecture so
that as what's available to us advances and our own understanding of what
the consumer wants advances, we don't have to scrap what we've already
done.

As Playboy has become more of a digital brand, how does technology enable
that? In contrast with how we thought 15 years ago or longer, now I would
say that technology is at the core of our business strategies. So as the
world has gone digital, our strategies revolve around creating compelling
entertainment content in a digital format that can be stored and repurposed
and re-presented across every medium as it develops.

So whether it's a Tom Friedman interview or the Playmate pictorial or a
short-form video for mobile, what we're working toward is having a single
digital asset management function and a single rights management function,
so that throughout our company and globally we know what we have, we know
what we have rights to and in which formats. So we can, in effect, reach
into that archive and tailor the right offering for that medium or for that
market.

What's the next iteration of your digital strategy?

There are several initiatives that are going to happen over the coming year
or two. One is certainly this Media Mall product, and the ability to move
from a world in which most video content has been only accessible by
consumers through a third party to a world in which a lot of video content,
ours included, is going to be accessible directly by the consumer.

Then a second big initiative: As companies like Yahoo and Google define
themselves as being at the intersection between entertainment and
technology, they create the potential to be important partners for
companies like ours. I think over the next few years, we'll forge some very
significant partnerships with some of those big players that will expand
our reach in a very profitable way.

And then the third initiative: I'm very intrigued by how much of what draws
people to online and the next platform of mobile worlds is really around
community and interaction. And I think that is going to open up additional
areas of opportunity for us. So whether that's dating or lifestyle guides
or different kinds of games and gaming, I think there are going to be some
other significant businesses beyond the present Playboy.com businesses.

Based on what you learned from bringing Playboy online, how will that
inform how you go into the next stage?

Maybe partly because we're a midsized company, not a large-cap company, one
of the things we tried to do early on is to be creatively adventurous but
fiscally cautious. One of the ways we're able to do that is to find and
work with really good partners. The Playboy brand and Playboy-style content
are real drivers of technologies, and consequently, we're an attractive
partner for technologies, and that's been true for many years. It was true
with cable, it was true as the satellite business took off, and it's true
with DVDs.



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