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Playboy (PLA) is delving into more explicit adult programming after exercising its option to acquire The Hot Network, The Hot Zone and related TV assets of Califa Ent. PLA obtained the option 2 years ago as part of its purchase of Spice Entertainment. At the time, Playboy decided to air more edited programming, leaving raunchier fare to other nets. But after seeing the nets' addressable HHs jump from fewer than 7mln in '99 to more than 36mln in 3Q '01, Playboy decided to make a deal. Under a separate transaction Mon, Playboy will purchase Vivid TV, which launched last year, from an entity owned by Califa's principals. PLA is paying $70mln for all three nets ($41.7mln for Vivid TV; $28.3mln for the Hot channels), and will re- brand them with the Spice brand. Playboy brass points to the added security digital brings adult programming (no signal bleeds) and the lust for erotica as factors driving the popularity of harder programming. The deals would increase Playboy's reach to almost 91.9mln and boost '01 cash flow by $5mln. In comparison, adult programmer New Frontier (NOOF) said in April that its nets were reaching 25.7mln addressable subs. "We think it's early enough in the rollout that it's an ideal time to create an umbrella brand with sub-brands underneath it," PLA chair/CEO Christie Hefner said during a conference call Mon. The deals are slated to close this month, with Playboy agreeing to pay cash or stock for the channels. In addition, Playboy plans to launch its interactive net Spice Platinum Live this summer. Playboy also reached a 10-year extension of its current output deal with Vivid Video, obtaining TV, VOD and video streaming rights. Playboy stock close at $17.50 Mon, a 52-week high. The deals were announced before the market opened.