‘Penthouse’ Empire Showing Cracks? (Press, 9 January 1985)

The soft porn industry in the United States is facing significant challenges, particularly evident in the struggles of the "Penthouse" empire, founded by Robert Charles Joseph Edward Sabatini Guccione, which has seen a decline in circulation and revenue. Once peaking at 4.7 million in the 1970s, the magazine's circulation has fallen to 3.4 million. Additionally, advertising revenue dropped by 16% in the first half of the previous year, impacting the $250 million enterprise. Guccione has faced numerous lawsuits, including accusations of libel from various public figures and claims from former "Penthouse" pets alleging exploitation. Guccione's recent activities have caused considerable controversy, particularly regarding the publication of nude photographs of 1984’s Miss America, Vanessa Williams. The release of these explicit images led to public outrage as Williams described feeling exploited and misled. This scandal reignited with new images appearing in the January 1985 issue of "Penthouse." Despite these mounting issues, Guccione maintains a lavish lifestyle in his $5 million townhouse in New York City, which serves as both his residence and the nerve centre of his corporate empire that includes a range of publications and business ventures. The townhouse is opulently decorated, featuring marble finishes, gold-leaf toilet seats, and an extensive collection of fine art. Guccione, aged 54, is portrayed as a workaholic who rarely leaves his home. He is cautious about public appearances and has a conservative family-oriented outlook, living with his partner Kathy Keeton for two decades. He controls the vast majority of the company, with his family members involved in the operation. In terms of revenue generation, Guccione insists that "Penthouse" is not truly suffering, citing an increase in cover prices and ad rates, although he acknowledges the financial hurdles posed by his ambitious plans for a follow-up to his film "Caligula" and his attempt to penetrate the casino market in Atlantic City, a venture which insiders doubt will succeed. As competition with Hugh Hefner’s "Playboy" continued, both "Penthouse" and "Playboy" faced declines in their traditional markets. Consequently, both companies are exploring new revenue streams, delving into sex programming for cable television and launching erotic video ventures. Guccione believes that the video cassette boom is crucial, indicating that a substantial portion of cassettes sold are erotic in nature. He claims "Penthouse" is positioned to lead in this emerging sector. In summary, while "Penthouse" and Guccione are enduring financial challenges amid increased competition and controversy, they are actively seeking new opportunities in the evolving landscape of adult entertainment.

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