In the summer of 2016, Vice Media co-founder and then chief executive Shane Smith took to the stage at the UK’s Edinburgh TV Festival to deliver what was pitched as a wake-up call to the media.
As I described it for The Guardian back then: “In a rambling speech interrupted by references to drinking, drug taking, becoming director general of the BBC – and, at one point, a moth landing on his head – the boss of the digital media empire lambasted broadcasters for neglecting the interests and needs of the world’s youth.”
At the time, Vice was riding high, on course to a $450m investment from private equity firm TPG the following year which valued the company at $6bn. It was a valuation built largely on the premise that Vice had found the secret to reaching the coveted youth demographic that legacy media was so worried was out of its reach. Vice was BuzzFeed’s slightly edgy older brother, at a time when the two companies were seen as the future.
Six years later, and Vice is reportedly considering a sale either as one entity or in pieces as it comes under pressure from TPG to pay off more than $1bn in debt. Neither option is expected to bring in anything close to the $3bn valuation it was looking at when it explored going public last year, let alone that $6bn peak. Disney, which invested $400m in the company in two rounds, wrote off its stake in 2019. Smith moved to executive chair following a string of #MeToo scandals at Vice, replaced by Nancy Dubec, the former CEO of A+E Networks, the broadcaster part-owned by Disney that had also put money into the company.
The story of Vice centres round how the once lauded company has spent the $1.6bn it fund-raised.
The core digital component has been a mix of video and a particular brand of often-obnoxious-but-almost-always-distinctive writing. The former has incorporated cross-platform documentaries of sometimes stunning quality and ambition, while the latter has delivered not just entertainment, but quality reporting, particularly on its Motherboard tech vertical.
However, one of the things that has marked out Vice has been its push from digital video into traditional TV and film, launching shows with partners such as HBO and even whole channels in the US with A+E and with other broadcasters around the world. While many of the offshoots have ceased operating in the past couple of years the push has helped it build a business making programming for streaming partners,
It also made acquisitions. The most high profile was the $400m purchase of Refinery 29, a site focused largely on entertainment content for millennial women through a largely feminist viewpoint. Less attention grabbing was Pulse Films, which it recently bought out in full after taking a controlling stake in 2016.
Revenues in 2021 were projected at $680m, up from $600m the year before, and the company has predicted they will hit $1bn in 2023. The truth is Vice is not in terrible shape, but it is also far from the valuations and hype that marked its time as a digital media darling. It’s also never managed to be consistently profitable.
Vice claimed to be profitable in the 4th quarter of 2020, but getting into the black across a whole year is something the company is still striving for, with Dubec saying that was the plan for 2022. Rounds of redundancies, so predictable they’ve been called a “macabre annual ritual” by the Vive union, are clearly aimed at doing just that. Not for the first time in the company’s 28-year history, nobody will be surprised if it misses the target.
It’s worth looking at the bits of the company now mooted as valuable enough in their own right to bring in a decent sale price. They are its content studio, which makes film and TV content for streaming services and which includes Pulse. Then there’s its branded content agency Virtue ironically named for a couple of reasons, not least its reported work with Phillip Morris on tobacco advertising.
Notably not included in reports of what might hold special appeal for acquirers are Refiery 29, or the rest of Vice’s news and culture journalism and content on the web or on TV.
Vice’s leadership these days describe the business as consisting of these three pillars, News and Entertainment, Studios and Virtue. They are in theory complementary and there are definitely synergies, but what has always held them together under the Vice brand has been the concept of youth, and Vice’s role as the way to reach it.
I’ve never really bought it. Even back at the zenith of Vice hype, when a then 46 year-old Smith was lambasting the rest of the media for failing a generation. This was, after all, a brand that had started out as a magazine in the mid 90s, that I remember being distributed in skate stores when I was young at the turn of the millennium. I mean, c’mon, two of its founders were born in 1969 and the third was born in 1970 (the less said about the youngest of the three the better).
Indeed, it was the insistence at Vice of conspicuously portraying a “cool” and edgy image, at industry events, at advertising newfronts, at (believe it or not) the pub it bought in London’s trendy Shoreditch, that made it all seem like they were trying too hard to project an image of youth.
The thing is, no one stays young forever, and Vice, when it was pitching itself as the one true path to reaching the valuable and seemingly unobtainable youth demographic, hadn’t been young for a long time.
A few months before Smith’s Edinburgh festival appearance, then CNN chief executive Jeff Zucker complained in an interview about Vice’s insistence it was uniquely placed to reach younger audiences.
“I think Vice is vastly overrated. And I think that if you are interested in reaching young males, which is what I think Vice’s calling card has been, CNN’s digital properties reach far more young men on a weekly basis than Vice does. What Vice has done well is tell its story, but it hasn’t delivered on what it says it does.”
But at the time, many others in ad and media land believed the hype, and some of them were prepared to pump money into the mirage. Money, it looks increasingly likely, that they won’t see a great return on. It’s probably just a question of which combination of which parts of Vice may work with which existing business. An anti-climactic end approaches.