Playboy CEO Christie Hefner announced yesterday plans to shut down its DVD business and focus on Internet video:

It is unavoidable that we reduce our cost structure to reflect current economic realities even as we continue to invest in our growth businesses.

We will also respond to changes in how consumers access content and advertisers use media.  Thus, we will continue to deliver more of our content digitally, using our assets across multiple distribution platforms and adding more a la carte offerings. Given the declines in the DVD market, we will exit that business in phases over a few months to concentrate on selling that content online.

Some of these cost savings will come from changing how we do business.  This includes capitalizing on technology in ways that include doing our own magazine pre-production work and building a more robust digital asset management system. 

Expect to see a lot more companies dumping traditional formats for Internet video in the near future.