Shane Smith is shaking up the established media industry in his role as co-founder and CEO of Vice Media. The company, which is best known for its edgy news and culture website Vice.com, this month announced plans to launch its first TV channel in the UK, Viceland, through a partnership with Sky (see Vice shakes up the TV market, below). This comes amid a period of rapid expansion for Vice as a global multimedia brand, including the recent launch of Viceland in the US.
Although it began life as a print magazine in Canada 22 years ago, Vice has adapted its business model to the digital age and now comprises a wide range of platforms, including online video channels, a record label and film production studio. By focusing on sub-cultures and alternative content that is largely ignored by more traditional media outlets, Vice has built up a following among the current generation of young adults known as millennials or Gen Y.
Smith, who has just been named Cannes Lions media person of the year 2016, is at the heart of this editorial ethos, reporting from the front line in dangerous locations around the world himself. Its popularity with millennials also makes Vice a draw for advertisers, many of whom are working with the media group to develop native content. Investors valued Vice, which operates in 34 countries, at $4bn (£2.8bn) in December. Minority shareholders in the business include Disney, Fox and advertising group WPP.
To discuss Vice’s recent rapid growth, its move into TV channels and the future of media, Marketing Week sat in on a conversation between Smith and guest editor Keith Weed, chief marketing and communications officer at Unilever. The business is a prominent partner with Vice and Weed was keen to learn more about how brands can tap the coveted youth market that Vice speaks to.
Keith Weed: What we’re seeing with Vice is something that we are seeing across the entire media ecosphere – a huge change in how people spend their time and engage with media. What has been the driver for you: the content or how you distribute it?
Shane Smith: It’s both. Content has to be good for people to watch it, which sounds logical but at the time we started, film was the holy grail, TV was okay and online was just crap.
We were the first to come out of the mud of online and go to TV – the first show we took out of online and put on TV was an HBO news show that won an Emmy. That showed us that it doesn’t really matter what screen you’re on as long as you are making good content. Distribution has become so important that we’re now buying TV networks because unless you own the platform, [you can’t] determine your editorial.
Keith Weed: You’ve become known for the way you present the content – it’s fresh, vibrant and very much of the generation. How do you make something that is so different also appealing?
Shane Smith: When a lot of people start doing [online] video, they will hire someone with pedigree from TV, who brings with them their producers and camera people. Right then you’ve already lost because it’s going to look like TV but worse. It will be expensive and you’re not going to be able to make a lot of it.
We go to the tech colleges and get the best shooters and the best cutters. There could be
a 23-year-old kid straight out of school and [we say to them] ‘okay, now you’re running
a TV show’. If you want to be successful with millennials, the [content makers] also have to be millennials because it’s their own language. That is why TV has had a difficult time because they keep hiring TV people, and commercials hire commercials people. You have to hire people that aren’t corrupted by that world.
“Young people have grown up with ad-free content and so visionary brands have to be smarter and develop new skill sets”
Shane Smith, Vice Media
Keith Weed: So that is how you get the freshness – it hasn’t gone through the traditional process of making a TV show or film?
Shane Smith: Yeah, sometimes it works and sometimes it doesn’t. Most of the time young people will make something and I’ll say ‘I don’t know what the hell that is’. But we put it up [on the site] and it does great because they know their own audience.
Keith Weed: Your decision to launch your own TV network – Viceland – seems to be breaking all the rules. How does a digital media company have the nerve to go into TV?
Shane Smith: I didn’t think the backlash would be so profound – I thought we would run into status quo problems, but [some companies] have tried to keep us off the air.
It’s funny because everyone knows that TV is changing and unless you have a complete three-screen OTT offer [over-the-top – delivered via the internet on mobile, TV and computer screens] and new ways of doing things with brands, [you can’t compete]. If you talk to the head of any media company, they all know it yet they still try to stop you from doing it.
Keith Weed: Is that down to jealousy?
Shane Smith: Yes is the easy answer. The harder answer is that [the old models] are so ingrained. If you’re a [TV] network in the US, you’re just seen as competition for other networks, but we see it more as a content creation engine. Sometimes it will be on mobile, sometimes online and sometimes TV. It has never been a better time to be a content creator because the mobile providers and the OTT companies [such as Netflix and Amazon] are now bidders [for content] as well as traditional TV.
If you actually have content that everyone wants, then you can call the shots. What is happening, however, is that we will say we are going [to partner] with someone over here but also with someone else over there, and that’s pissing people off.
Keith Weed: Speaking of pissing people off, how are you getting on with the brands?
Shane Smith: We’re not pissing off the brands. You know this better than me, but brands have realised at the CMO and CEO level that we have to start innovating; we have to start doing things differently and start experimenting, particularly with the rise of things such as ad blocking technology, DVR [digital video recorders] and OTT.
We have to figure out what works and we have to integrate. A lot of lip service was paid
in the past to not calling a brand a client, but calling it a partner. Well, you really have to partner now – and when I say partner I mean partner at the production level, because I don’t think it works otherwise. Young people have grown up with ad-free content and so visionary brands are saying ‘I get that and we’re going to interweave and be part of the process’. That’s
a harder job – you have to be smarter and develop new skill sets, but the brands that
don’t do it are going to be left in the dust.
Keith Weed: So looking ahead to new technology, what are you excited about? Obviously everyone is talking about virtual reality (VR) at the moment.
Shane Smith: We were one of the first investors in VR because it’s better. It’s not only developed for gaming – if you want to watch a news story and see Ebola in Liberia, VR can put you there so that you’re seeing people all around you. It’s just better, but you have to film it with a special camera, have special technicians and sound.
Somebody is going to come up with the iPhone of VR and we’re saying we want to have a repository of music, fashion, cooking and news stories [tailored to VR] so that when the take-up happens, we can populate it with our content. That’s being platform-agnostic.
Our philosophy is to invest in the cameras and the sound recording and invest in creating a library [of content].
Keith Weed: So you’ll be prepared for the future when it arrives. A parallel conversation
to have is about sustainability – environmental and social sustainability. It’s a passion we both share and is one thing that helps Unilever and Vice to partner because of those fundamental beliefs. What are your views on how to engage your audience in some of these important topics? Is there a way of telling that story that is more engaging?
Shane Smith: There is a comprehensive understanding by millennials that the number-one problem facing humanity today is environmental degradation. It is coming, everybody agrees. Sustainability is a huge part – obviously cutting carbon emissions is massive, but there are also things such as sustainable farming [that are important]. On a large scale you need to have the big brands saying we are committed to this. It’s then on media’s shoulders to tell that [story] and say why this is important.
Not everybody can be an expert about everything. So we have to go out and say ‘here are the incremental changes we can make when we purchase not only a car or a house, but also shampoo or ice cream or consumer durables, because some are better than others and if we make these incremental changes, it does get better’.
Keith Weed: So looking into the crystal ball, how do you see the future in this fast-changing media world?
Shane Smith: Holograms (laughs). I’m not really a crystal ball kind of guy, but what I will say is that there will be a lot of new companies and technologies coming up. To get the scale of content and the infrastructure needed to produce content is very difficult, but I think you’re going to see a lot of traditional enemies – new media and old media – finally linking up and some will work, and some will not.
From the end of the 1960s until now, 90% of media and advertising has been geared to the ‘baby boomers’ [generation], but very rapidly – I mean over the next two to three years – you’ll see that completely shift to Gen Y, because Gen Y are just beginning to flex their muscles and get money. The baby boomers are sadly dying off, so Gen Y is going to be the number one cohort.
Vice shakes up the TV market
Vice Media’s ambitious decision to launch a global network of TV channels is a natural result of its “platform-agnostic” approach to content distribution, according to co-founder and CEO Shane Smith. Earlier this month, the company announced a non-exclusive deal with Sky that will see its new channel, Viceland, offered to all UK and Ireland customers with basic Sky TV packages when it goes live in September.
The deal comes after Viceland launched in the US last month through a partnership with media company A+E Networks. Smith says Vice is planning to launch a total of 12 channels in Europe over the next year.
The company believes its expanding online audience of millennials will transfer to TV, provided the content is available across a wide range of platforms. The Sky deal includes making Viceland available on Now TV, the broadcaster’s on-demand service, while subscribers to the premium Sky Q product will be able watch Vice’s popular online video content via their set-top box.
Smith is looking at partnerships to enable Viceland to appear on online subscription services such as Netflix, and tie-ups with mobile network operators. “We view it as a content creation engine – not a TV network,” he says.
This approach appears to be drawing strong advertiser interest. Viceland launched in the US with a roster of blue-chip advertisers including Unilever, Bank of America, Diageo and Samsung. Vice has pledged to reduce the amount of standard-format TV advertising and instead develop native ads alongside brands, which it claims will have greater appeal to its young audience.
Vice is producing most of its programming in-house and has signed up Oscar-winning film director Spike Jonze to serve as co-president of Viceland. The role includes overseeing programme creation and training Vice’s young team of content makers. One of Viceland’s new original series is Gaycation, a travel show about LGBT cultures starring actress Ellen Page (pictured above).