NEW YORK, NY – According to a private-placement notice filed with the Security and Exchange Commission (SEC) last week, Penthouse Media Group Inc. has raised $15 million in preferred stock and $33 million in bonds, part of which will be used to fund a broadcast network to compete with the likes of New Frontier Media Inc.’s The Erotic Network and Playboy Enterprises Inc.’s Spice Channel.According to published reports, the company will use $26.2 million to repay debt, including money owed to Penthouse CEO Mark Bell’s buyout firm in Florida (Marc Bell Capital acquired Penthouse through bankruptcy proceedings in October 2004), and will devote $11.5 million to developing the new broadcast network.

“The goal is to make high quality, very different types of movies from what people see now,” Bell said in an interview with The Financial Express. “We are trying to differentiate ourselves from the Spice network at a competitive price.”

According to Bell, the network will offer viewers programming via video-on-demand, pay-per-view and cable channels. Bell said the company hasn’t decided how much it will charge for the various services offered by the still-in-development network.

Bob Guccione founded Penthouse in the UK in 1965 and first published stateside in 1969. At its peak, the magazine had a circulation in excess of 4.7 million, serving a market that favored photos more explicit than those offered by primary competitor Playboy.

Analysts generally cite a combination of the proliferation of explicit magazines hitting the news stands starting in the late 1980’s and the advent of the adult internet as major factors in Penthouse’s decline. These days, Penthouse is aiming to be more of a “men’s lifestyle” magazine than an adult entertainment publication, and monthly circulation now hovers around 350,000, according to Bell, although he says that “subscriptions are finally going in the right direction.”