In 2017, Vice was valued at more than $5 billion, a far cry from just a decade ago, when it recorded revenues of only $28 million. How did a tiny Montreal magazine manage to become a global media powerhouse?
Updated on Jan. 29, 2017
In less than 20 years, Vice has literally become a media empire – and nothing seems to get in the way of its ever increasing expansion. Here’s a snapshot of the company in 2015: 36 offices around the world, a digital platform network, a production studio, a record company and a publishing house.
Vice is now considered a key player in the TV industry, thanks in part to partnerships with such established brands as HBO and A&E. And this despite the low cable ratings of Viceland in the US, the UK and Canada (which no doubt played a role in the end of the partnership between Vice and Rogers in 2018).
How big is Vice getting? Here’s a look at some recent partnership agreements:
Vice owes its success to its ability to reach younger audiences, those who, more often than not, tend to brush off traditional media. Reliable data confirming Vice’s popularity among the 18-35 age group remains scarce, but ComScore data obtained by Digiday in 2014 reveals that, in the U.S. alone, nearly two-thirds of vice.com users are indeed millennials.
These millennials seek content they can identify with, and they want access to it whenever they want, wherever they want – and Vice’s multiplatform approach and alternative style is just what they are looking for. In essence, Vice’s attitude is: it’s not about the packaging, it’s about the content.
“For this generation of people, it’s not the type or size of the screen that matters, it’s the quality of the story and the way it’s being told”, said Andrew Creighton, Creative Director at Vice.
The company intends to keep its philosophy intact as it makes the transition from mobile platforms to the big screen, courtesy of partnerships such as the one with 20th Century Fox.
The authenticity of Vice’s various contributors is also no stranger to its appeal to millennials. “They're not seasoned network correspondents, and that's part of their charm”, Vice Consultant and former Viacom CEO Tom Freston believes.
Like many of his employees, Vice head honcho Shane Smith often gets personally involved in the various events or causes related to content produced by his company. Following the broadcast of Vice’s Killing Cancer documentary on HBO, Smith got involved in a fundraising campaign benefitting the Mayo Clinic research center, pledging to match every donation dollar-for-dollar, up to a maximum of $1 million. The result: the Mayo Clinic raised over $2 million. Online donations reached a record level, something that the center believes is attributable in large part to Vice’s millennial audience.
This type of success seems to reflect Maker Studios’ Chief of Content Erin McPherson’s belief that to reach young audiences, “the new authority is authenticity”.
One of Vice’s undeniable assets is its internal ad agency, Virtue Worldwide. This ironically-named branch of a media entity more often associated with irreverent and provocative content was launched in 2006 in order to “help global brands find new ways of communicating with the world's youth”.
However, the line between both entities can sometimes be blurred. Indeed, Virtue Worldwide’s roughly 100 employees work closely with Vice’s staff in order to provide services to such major corporations as Coca-Cola, AT&T, Dell, Intel and Chanel. However, Shane Smith insists that no content produced by Vice has even been modified at the request of a client.
Virtue’s business model is based on the creation of content sponsored by brands. For example, the documentary series on technology Motherboard is produced by Vice for its client Intel. While Intel’s logo has been integrated to the series own logo, it is never seen on the featured products. The same concept applies to Behind the Sound, a show created in partnership with Bose.
Shane Smith believes such an approach is much more transparent than actual product placement and far more engaging than traditional advertising.
“Engagement is only possible now because brands are waking up to the fact they can engage with their consumers in a meaningful way, he said. And that doesn’t come through a 30-second spot. That doesn’t come through a radio ad. It doesn’t come through outdoor billboards. It comes through creating content your audience enjoys.”
Like its number of new partnerships, Vice’s value as a company is also reaching new heights, climbing from $1.4 billion in 2013 to 5.7 billion in 2017.
Indeed, the stock market is abuzz with the possibility that Vice might eventually go public. Asked about it during London company WPP’s annual meeting, Shane Smith indicated that he was currently considering one of three options:
Regardless of the option he chooses, Vice’s CEO remains optimistic for the company’s future. “I always used to say we are going to be the next MTV, CNN, and ESPN all rolled into one, he said. But with the scale of the Internet, we're going to be 10 times that scale.”
One thing’s for sure: the success of Vice, and especially its journalistic and documentary content, is living proof that the younger generation remains interested in the news and public affairs content, especially when these are personalized and subjective. Initiatives like Radio-Canada's Rad show that traditional newsrooms are giving this new model a try.
Posted in: Industry Transformations