NEWSWATCH by Thomas Griffith: Merchants of Raunchiness

The sharpest division in American popular culture is between those who like a lot of sex in what they read and see and those who don't. Those who don't have a hard time ignoring the subject: four of the top ten bestselling magazines on the newsstands are skin books. In this highly successful and sleazy field, the big news is that Playboy, once the undisputed leader, no longer rules the roost.

Faced with returns of thousands of unsold newsstand copies, Playboy has now cut back its circulation guarantee from 5.4 million copies a month, to 4.5 million—exactly the same as its upstart rival Penthouse. (Hustler and Playboy's naughtier younger brother Oui are the other two top sellers.) Since with age and success Playboy has become the most "conservative" of the sex magazines, some might argue that its newsstand decline only proves Gresham's law. But this morality play isn't all that simple. It has more to do with society's shifting sexual standards and who is more adept at exploiting them. In this, Penthouse Publisher Bob Guccione, a canny tortoise, has at least drawn even with the Bunnies of Hugh Hefner, whose bigger but long overextended Playboy empire is in trouble. Only Hefner's London gambling clubs, which attract rich Arab bettors, are an unabashed success. The IRS is also questioning whether Hefner's high living expenses ($3 million in 1976) are deductible.

It must be hard for the IRS, or for Hef himself, to sort out what is pleasure, profit or business expense in Hef's lifestyle. The difficulty is evidenced in this month's nudie Playmate, the magazine's famous foldout. Along with 14 undressed pictures of a 20-year-old blonde, the text explains that she has landed a top role, "that of Hef's more-than-occasional companion." Tax man, how would you score that? Business promotion? In fact, one of Playboy's problems is its narcissistic photographic preoccupation with Hefner's Playboy mansion, which must do untold damage to his assumed reputation for sophistication. Surrounded by young beauties, he looks a dour sybarite Square. Hefner is in the business of selling fantasies; he has made the mistake of trying to live his. Enter Rival Guccione. who does not show his readers how he lives.