Playboy looking to sell NFTs amid company growth push
Playboy CEO Ben Kohn joined Yahoo Finance Live to talk everything from earnings to future growth plans.
Video Transcript
- Your-- your first report, revenue up in fiscal 2020 89% year over year, and it's $48 million. We wish you the best. I got to ask you though. If-- if-- and I'm looking at the notes on here-- if-- what we know as Playboy drove $3 billion of global consumer spending, how do you grow outside of the iconic Playboy brand?
BEN KOHN: Great. Thanks for having me again. Look, this is one of the most unique platforms in the world. You know, as you said, consumers spent in excess of $3 billion last year buying products in over 180 countries.
We're organized around four fast-growing multi-billion dollar product categories. Sexual wellness, which today is a $240 billion industry projected to grow to $400 billion by 2024. It is highly fragmented. There is no dominant player in that industry. And we believe, given the DNA of this brand, it's right down the middle of the fairway for us and we can become a dominant player in that industry.
Our apparel business was up 15 times over the last two years. Our street-wear business in the United States did in excess of $100 million just with two partners. And consumers spent in excess of a billion dollars buying our products in China last year just on ecom.
We've also acquired two other companies, so we have a robust balance sheet today, something we have not had historically. We bought a company called Yandy in 2019, and we just acquired Lovers, which is an omnichannel retailer, 41 stores plus ecom, in the sexual wellness space.
And so it's not only Playboy, but it's what you can put on the back of Playboy and leverage that international distribution that we have.
- Okay, Ben, you just mentioned that you acquired two other companies. When you talk about scaling your business here, what's in the pipeline? I guess are you looking to continue to grow through M&A going forward?
BEN KOHN: Look, we have great organic growth internally. Our-- our business again last year up 89%. There's some really interesting categories that we're looking at such as NFTs, starting our lingerie line, that are not in our numbers right now, including cosmetics. But we also have a very robust pipeline of M&A. That's my background. I spent 25 years in the private equity industry.
We also have $180 million in [? NULs, ?] that we can shelter income that we buy. And so I think their growth is-- can come twofold. It's not only the organic growth that we're seeing, which we can now really accelerate given the cash on their balance sheet. But it's also with inorganic growth through the acquisition pipeline we have.
- Ben, I had wanted to ask you about gaming and lifestyle and if-- whether a new iteration of what some of us remember as kids, you know, those iconic Playboy clubs, might be in a more-- a-- a new version. But you said NFT. Help us understand what on earth you have on a digital side that could become an NFT, a token that you could sell to generate the kind of revenue on a recurring basis?
BEN KOHN: Yeah, look. We have a catalog that is 68 years young is the way I like to think about it. We're talking about millions of pieces, some of the most iconic photography over the last 68 years. We also have a 5,000-piece art collection.
But I think our NFT strategy will go beyond that. Our NFT strategy will also include new works. So-- people don't know LeRoy Neiman was on staff at this company painting-- there's a lot of paintings for the company that we used as covers and other pieces of art with-- within the magazine-- when we did have a magazine, which we don't anymore.
And so we're working with a whole host of new artists as well to continue to expand that library we have. And so, again, it's the library, it's new arts, and then it's working with some of the great influencers we work with where we think we can create unique, one-of-a kind NFTs.
- So let me ask you a follow up on that. The original first cover, Marilyn Monroe. If you were to make that into an NFT and I was the purchaser, do I own the rights now? Nobody can use it, and if they do, they got to pay me? Or did they still pay Playboy Group?
BEN KOHN: So, you know, it depends on how we do it, right? We actually-- we own the original photos. It's a question of whether we're selling those or we're selling something new coming off the back of it. What's really unique about the NFT market is not only do you get paid on the first transaction, but you get paid on every subsequent transaction. So if these increase in value over time or trade hands over time, you continue to get paid on that.
So we're looking at setting up a business really for the long term. We're going to enter the space slowly, but we think there's a massive opportunity for us long term. And there can also be a very long tail on this. And so that's what excites us.
- Ben, when you think about Playboy historically, I think a lot of people think the majority of the users, the majority of the people that it appeals to, is men. I understand that you're focused on capturing more of the female audience. How are you doing that?
BEN KOHN: Look, we-- we brought in a largely female team. 100% of our content team are made up of women. Over 50% of the employees today are made up of women. And that was something I did when I took over as CEO. I thought that this brand, as powerful as it was, would be better told from a female perspective.
And so if you look at what's happened over the past two years since we've done that, our average age of our audience has dropped by over 10 years. 90% of our audience today is under the age of 40. Our female audience has grown 70%.
And then when you look at the sales, which for me as the CEO that's what I really look at, I look at the growth of our misguided business again, up 15 times selling women's apparel. And so that coupled with what we're seeing in color cosmetics, on our lingerie side, this is a brand that resonates with everyone.
