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Global,Ad Trends,Online Video

Vice Brings Digital Ideals To TV

Vice Media, feted for its ability to woo advertisers as well as millennial viewers online, is trying out the same formula on TV.

It’s part of a bid by the sometimes provocative youth media company, valued at around US$4.5 billion, to extend monetization across more platforms, genres and geographies.

“Traditional advertising isn’t working online, it isn’t working in mobile, it isn’t working for young people,” contended co-founder and CEO Shane Smith at this year’s APOS conference, while pitching Vice as the voice of a generation.

Vice, which began life as a free magazine 22 years ago, is known for its freewheeling news reporting (resulting in a programming deal with HBO) as well as genre-specific online verticals, ranging from food to mixed martial arts.

Now executives want to combine digital content sensibilities with the ad rates enjoyed by traditional TV. In February this year, they launched a linear channel, a lifestyle offering called Viceland, via JVs with A+E in the US and with Rogers in Canada.

Viceland's commercial model is geared more towards advertiser integration and branded content rather than standard ad slots, with less time devoted to advertising overall.

It's a strategy inherited from Vice’s online operations, echoing the early days of television.

How far Smith and his JV partners can take it with Viceland depends on advertiser demand, as well as ratings success among a younger audience watching less TV.

Smith is confident that the formula works.

“We don’t look at it as a network,” he said. “We say it’s a content creation engine. That can go into mobile, it can go into online, it can go into TV.”

Broad Reach

TV channels still need sizable and sustained audiences to attract ad dollars, while entry costs are high. Nonetheless, Viceland has secured a promising place on the dial in North America, replacing H2 from A+E and The Biography Channel from Rogers.

Its North American partners are also shouldering much of the risk. While Vice oversees marketing and content, the channel is majority owned by A+E (which also has a 10% stake in Vice itself) in the US, and by Rogers in Canada. Both partners manage local distribution and assist with ad sales.

Smith, keen to extend the reach of Vice’s content, has also signed multiplatform deals for Viceland with pay-TV majors Sky in the UK and Canal Plus in France, marking the start of a wider international rollout.

Sky and Canal Plus will launch Viceland in their respective markets later in the year.

Additional foray in linear TV and online are on the cards for Asia as well as Europe, including large partnerships in China and Japan. Vice runs local operations in both countries, part of a global network of 36 offices that includes Australia and New Zealand within Asia-Pacific.

Smith wants to do more, and is seeking out local partners.

“India, Indonesia, Philippines, Southeast Asia are very important to us; a young population thirsting for lifestyle content, music, travel, food etcetera, so we’re really excited," he told APOS attendees.

"And obviously here, mobile and OTT platforms are very exciting for us.”

Signature Style

For Smith, success relies on handing production budgets to a younger generation, in tune with what their peers want to watch. The strategy can be foolhardy, he added, but it sets Vice apart.

“We view it as a laboratory," he said, "where we get to make a lot of great content, and then auction it to the highest bidder or to the best platform in any country.”

Vice’s irreverent style, which could upset conservative segments in Asia, has drawn plenty of critics, doubting the extent and durability of its appeal.

Despite the naysayers, the company’s value has soared over the past five years.

In addition to A+E, investors now include Disney (on top of its stake via its part ownership in A+E), 21st Century Fox, Raine and WPP, all placing bets on evolving trends in content and monetization.

In a deal announced after APOS, Viceland and Disney-owned ESPN will share programming and co-develop short-form series.

For Vice, investor money helps power its production engines. These are more important than ever, as Viceland competes for eyeballs and ad budgets on TV.

“We said, we’re platform agnostic, why don’t we act it,” Smith said, “and be on all platforms, all screens, all the time.”

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