PUBLISHING Internet sharply cuts into sales of adult magazines

Larry Flynt says he began diversifying his company a decade ago.
NEW YORK (AP) -- After 35 years in the business of titillating and offending, pornographer Al Goldstein says his magazine can't compete anymore. The audience is just as large, he says, but the Internet has transformed the product and its delivery.
Just over a month ago, Goldstein stopped publishing Screw magazine and filed for Chapter 11 bankruptcy, giving him a chance to cut costs, relaunch the magazine and refocus attention on his Web site.
Similar pressures are seen throughout the adult publishing field. Bob Guccione's General Media Inc., for instance, has also filed for Chapter 11 protection, although the company's trademark Penthouse magazine continues publishing while the company restructures.
On Friday, Guccione resigned as CEO of General Media's parent company, Penthouse International. He remained at the helm of the magazine, which has seen circulation decline from nearly 1 million to 565,700 over the past five years.
Goldstein said circulation woes throughout the field show "we are an anachronism; we are dinosaurs; we are elephants going to the bone cemetery to die. ... The delivery system has changed, and we have to change with it if we want to survive."
Drastic sales drop
Founded in 1968, Screw was successful in its early years. Its mix of scatological editorials, pornographic pictures and tongue-and-cheek articles sold as many as 140,000 copies a week. By last year, sales had dipped to around 30,000.
Purveyors of adult fare must expand beyond traditional publishing methods to survive, said Samir Husni, head of the magazine program at the University of Mississippi's journalism school.
"The magazine may remain the cornerstone for the name brand, but in the future, the real money will be made elsewhere," Husni said. Hundreds of new adult Web sites launch every month, he said, compared with 30 new sex magazines all of last year.
"That's one magazine category that really can't compete with the Internet and television," Husni said. "Sex has become so much a mainstream entity."
Hustler Magazine publisher Larry Flynt, who says his company has succeeded in the new marketplace, agrees that magazines are a dying breed.
"This past decade has been very, very bad for men's magazines and it could become worse," he said by phone from his office in Los Angeles. "I'm not going to say it's going to become extinct because some people will always want to feel that magazine in their hands, but it's never going to have the impact it once had."
Began diversifying early
Flynt said his company began to diversify over a decade ago, and now has a presence on the Internet and in the adult movie industry.
"You can see more on cable and satellite today than you could see in what I published in 1974," Flynt said. "I honestly think Guccione and Al Goldstein were not aware of what kind of an effect technology was going to have on publishing."
Even an industry stalwart like Playboy, which has remained profitable, has seen growing success from its online business while magazine revenues have lagged.
Representatives for Playboy Enterprises Inc. did not return calls for comment, but in its most recent quarterly results, the company reported that its online business swung to a profit of $474,000 compared with a loss of $2.2 million in the same period a year ago. Meanwhile, publishing earnings dipped 47 percent to $1 million because of a decline in advertising revenue.