Don’t let anyone kid you about how the Internet destroys incumbents’ business models. Case in point: General Media, the publisher of Penthouse magazine. It filed for bankruptcy protection in August of 2003, and it now says it has a reorganization plan and expects to re-emerge in February of 2004.
What did the web do to General Media’s business? Well, the publisher’s revenues dropped by nearly half between 1998 and 2002 — gosh, wasn’t that Internet thing growing like ponzi during said period? — while it racked up $40 million in debt. At the same time, its flagship magazine’s circulation dropped from nearly 1 million in 1998 to about 565,000 last year, almost a 50% drop in four years.
You want disruption? We’re talking destruction.