<<

Case study: Vice

Enders Analysis 46A Great Marlborough Street, London W1F 7JW +44 207 851 0900 Overview [email protected] Vice is a mostly online media organisation, which produces articles and videos August 2014 dealing with niche topics in an immersive and in-depth . The original

magazine was founded in and the organisation is based in New York, but there are dedicated regional operations in 20 regions, including the UK. story

[Source: Vice]

Vice distinguishes itself from other media services largely through the type of content it produces. Rather than aiming for the completeness of a newspaper or the depth of a specialist magazine, Vice aims to cover the sort of weird and wonderful stories which other organisations do not, or to go to the sort of extremes others are not prepared to in pursuit of a story, or to cover a story from a unique angle. Examples of the first are features like “Meet the UK’s ‘Most Expensive Male Escort’”, and “Exploring Japan’s Secluded Grime Scene”. Examples of the second include their five-part video series on the Islamic State, where a Vice News reporter was given access to members and meetings of the organisation, as well as pieces such as ‘My Weird Dinner Party at Bolivia’s Cocaine Prison’.

Through its various operations, Vice fulfils PSO1, by presenting and reviewing music and producing comedy pieces, PSO2, by reporting on current events, PSO3

through Vice Sports and Munchies, their food site. It also fulfils PSO5 through in- depth informational pieces on social issues, and special interests. Finally, they fulfil PSO8 through representation and discussion of LGBT culture as well as local and regional concerns.

Background and context

Vice magazine was founded in in 1994, with a website following two years later. In 2007 Vice launched the video site VBS.TV. The operations were merged under Vice.com in 2011. co-founder and CEO described the aim of the magazine in interview with : ‘we wanted to be the first international voice for the universality of youth sub-culture’.1 Since its launch as a magazine, Vice has become a huge global media organisation, with visitor numbers in the hundreds of millions. In 2013, bought 5% of Vice Media in a $70 million deal, cementing its status as a big player in online media. Part of the context Vice sits in is that due to the zero marginal cost to a publisher of distributing anywhere in the world online, even what was a ‘sub- culture’ or ‘alternative’ can reach the kind of scale traditional media could only dream of. Vice Media has over the years grown to include a , TV production studio, a book publishing division, a creative agency, and a pub in East London, reflecting the eclectic concerns of the core business. Online, Vice is currently in a period of rapid expansion of its media offerings. In 2014 alone, it has launched Vice News, Vice Sports and Munchies (its food channel). Channels on travel, gaming, photography and comedy are currently in the works. Vice is cross-platform, with its content distributed across YouTube, Tumblr and other platforms. With consumption habits and social and discovery platforms vulnerable to rapid change, concentrating on promoting the content and brand above driving traffic to Vice.com looks to be a smart move. It is an approach favoured by certain other media companies, such as Fusion,2 while most use alternative platforms as a way of routing traffic to their central site. One reason Vice is able to do this is commercial: it relies less on display ad revenue and more on its content as a sponsorship opportunity and as a showcase for brands of the sort of popular, shareable content it can produce. From a sponsor’s point of view, the more locations the content can be seen in, and the more pervasive the brand awareness, the better. This approach has raised concerns around sponsoring brands influencing content decisions,3 which have unsurprisingly been dismissed by Vice executives.4

Content strategy

Vice has several forms of output, including photo galleries, news videos, and articles about the writers’ personal experiences. The common themes throughout its offerings are 1) it targets a young demographic and 2) it is not like other media: it covers subjects others do not, in a casual editorial voice others avoid. This approach means that the range of subjects its output deals with is exceptionally broad, from neuropsychology to pornography.

1 http://www.theguardian.com/media/2008/mar/30/pressandpublishing.tvandradioarts 2 http://fusion.net/ A TV and digital network from Univision and ABC, currently in beta. 3 http://gawker.com/working-at-vice-media-is-not-as-cool-as-it-seems-1579711577 4 http://www.theguardian.com/media/2014/mar/02/vice-media-shane-smith-north-korea

2 | 7 Case study: Vice August 2014

Perhaps the ‘archetypal’ Vice piece is a gonzo journalism-style account of an outrageous situation or experience. Examples such as “The Kentucky Derby… On Acid!”, “I Went Undercover in America’s Toughest Prison” and “Making Friends Inside ’s Last Porno Theatre” give an idea of the sort of content Vice is known for. These tend to be a couple of thousand words of text, usually accompanied by photos from the event in question. Video is central to Vice’s output, and Vice has been putting video online longer than most media companies. The main Vice channel on YouTube has uploaded 1,276 videos,5 and these range from one-minute comedy videos to half-hour or longer in-depth documentaries on subjects such as Ukraine Fashion Week. Vice News on YouTube has so far uploaded 533 videos. These include 3-minute daily news briefings, as well as much more involved videos such as the 40 minute report on the Islamic State. One of Vice News’ innovations compared to traditional news organisations is that it also frequently produces ‘raw coverage’ videos, which are hours of unedited footage from areas of instability streamed live and then uploaded alongside the edited news stories.

Contribution to Public Service Objectives PSO1 – Cultural activity Vice showcases and reviews music, primarily through Noisey, its music media channel, and Thump, its electronic music channel. Vice UK’s content includes comedy, such as an animated guide to “How Guys Should Greet Each Other in 2014”. It also showcases the work of UK artists, primarily photographers. Vice article

[Source: Vice]

PSO2 – News and current affairs Vice has a dedicated news channel, Vice News, where videos and articles report and comment on current affairs. The brand has carried its ‘immersionist’ philosophy into the newsroom, sending back regular frontline dispatches from conflicts in Ukraine, Syria and Gaza. Indeed, Vice News has made the news

5 Correct as at 18/08/2014

3 | 7 Case study: Vice August 2014

through this approach, when insurgents in Ukraine captured its correspondent Simon Ostrovsky. Vice news article

[Source: Vice]

On top of this traditional newsroom activity of reporting on stories of global significance, Vice News sees its brief partly as ‘shining a light on underreported stories’. To this end they carry stories such as “Sweden Plans to Thwart Racism By Eliminating the Mention of Race From Its Laws” and “A Volcano of Garbage in the Arctic Has Been Burning For Eight Weeks”. This approach also expresses itself in Vice’s unusual angles on mainstream stories, such as a story on how Crimean heroin addicts suffered from the change in drug treatment policy after the region’s annexation by . PSO3 – Sports and leisure Vice Sports was launched in June 2014 as a dedicated sports channel. This largely covers sports from a US perspective, and given the lack of overlap between the sporting concerns of the US and UK populations, much of the content is of limited interest to a UK audience. However, there is still sufficient content to satisfy PSO3, even if this is often written from a non-UK perspective (e.g. “NBC Is Betting Big on British Soccer”, or “An Englishman Explains Cricket to a Clueless American”).

Vice also caters for other leisure interests. Munchies, its food channel, contains recipes as well as news and information about food and restaurants. Fashion has long been an area of concern for Vice. There is a fashion section the main website as well as a dedicated channel, i-D, a fashion magazine acquired by Vice and in which the Vice branding is much less apparent than in its other channels. PSO5 – Factual Vice produces factual content on various PSO-relevant subjects. Motherboard is a largely technology-concerned channel, which includes articles and videos dealing with scientific subjects (e.g. “What Summer is Like on Saturn’s Moon Titan”). Religion is an occasional subject of pieces, such as “Meeting Nepal’s Living Goddesses”, and “Exploring the Evangelist Churches of East London’s Industrial Estates”. Social issues are frequently dealt with, with pieces from Vice News such as “US Justice Is Racist, and the UN Is Powerless to Change It”.

4 | 7 Case study: Vice August 2014

PSO8 – Communities and regional Vice produces a range of material dealing with the concerns of different communities. Its UK operation publishes pieces that reflect local areas, such as “A Love Letter to Margate”. Its output on other topics often has a local angle, such as “The Peckham Sapeurs” in fashion and a video series about Scottish cuisine, “MUNCHIES Guide to Scotland” LGBT issues are a common topic, with articles like “Life in the Closet as a Member of a London Gang” and “Why the Gaming Industry Plans to Keep Gay Characters on the Sidelines”. Vice community article

[Source: Vice]

Audience reach and profile

In June 2014, according to comScore, Vice.com’s website and its mobile apps reached 4.2 million internet users in the UK, more than doubling year-on-year, equal to 9% of all internet users, though growth has slowed since the beginning of the year. Just over a third of Vice’s audience access it via smartphone or tablet, of which the vast majority do so exclusively this way.

VIce UK audience by device (m) 5 4.4 4.1 4.1 4.2 3.8 4.0 4.0 4 3.5 1.5 3.1 1.5 2.8 2.8 1.4 1.3 1.5 1.4 1.5 3 2.6 1.1 2.3 2.3 0.9 2.1 0.9 0.9 0.1 0.2 0.8 2 0.2 2.9 2.4 2.7 2.6 2.6 2.6 2.5 2.7 1 2.2 2.1 1.9 1.8 1.9 2.0 2.2

0

Total PC Mobile only PC, smartph0ne and tablet users [Source: comScore MMX] 5 | 7 Case study: Vice August 2014

As in the US, Vice’s UK audience skews heavily young compared to the overall internet audience and other online news services. In total, nearly two thirds of its users are under 35, compared to just over a third for BBC News and around 40% for the Independent newspaper.

Internet audience share by age group, June 2014 (% of total)

100% 12%

24% 29% 80% 25%

60% 41% 31% 29% 40%

19% 23% 20% 24%

11% 14% 9% 0% 5% 4% Vice Media BBC News Independent

Under-18 18-24 25-34 35-54 55+ PC, mobile and tablet users [Source: comScore MMX]

Business model and revenue

On the internet, Vice makes money through advertising, licensing content and sponsorship. It often creates the ad campaigns run on the site itself, through its ad studio Virtue. Smith claims that the company as a whole is on track to generate $500 million in revenue in 2014, and predicts $1 billion by 2016.6 Commercially, Vice aims to appeal to sponsors and advertisers on two fronts: 1) its audience, which it boasts is largely composed of affluent young men; and 2) its content expertise – Vice has a successful formula for creating content which young people read/watch, share and talk about. Its rate card7 claims 220 million monthly uniques in 2014. Vice Media employs 4000 employees over 35 offices worldwide.

Summary Vice produces ‘alternative’ content at mainstream scale, with enviable financial success. The topics it addresses are neglected in traditional media, and it has one of the youngest audience profiles of any news-producing online organisation. As with some other internet properties, especially , Vice combines humorous pieces on topics of little significance with in depth pieces on matters of global significance, in a way that is particular to online media companies. Its business model is also representative of a particular way sites make money: content is a sponsorship vehicle, as well as being a proof of concept for the sort of things Vice’s creative agency could create. This has raised concerns over the impartiality of some of Vice’s output, although we note that traditional media regularly navigates similar hazards.

6 http://www.businessinsider.com/how-vice-will-make-500-million-in-2014-2014-6 7 http://scs-assets.s3.amazonaws.com/int/2014-Vice-Digital-Media-Kit.pdf

6 | 7 Case study: Vice August 2014

Important notice: By accepting this research note, the recipient agrees to be bound by the following terms of use. This research note has been prepared by Enders Analysis Limited and published solely for guidance and general informational purposes. It may contain the personal opinions of research analysts’ based on research undertaken. This note has no regard to any specific recipient, including but not limited to any specific investment objectives, and should not be relied on by any recipient for investment or any other purposes. Enders Analysis Limited gives no undertaking to provide the recipient with access to any additional information or to update or keep current any information or opinions contained herein. The information and any opinions contained herein are based on sources believed to be reliable but the information relied on has not been independently verified. Enders Analysis Limited, its officers, employees and agents make no warranties or representations, express or implied, as to the accuracy or completeness of information and opinions contained herein and exclude all liability to the fullest extent permitted by law for any direct or indirect loss or damage or any other costs or expenses of any kind which may arise directly or indirectly out of the use of this note, including but not limited to anything caused by any viruses or any failures in computer transmission. The recipient hereby indemnifies Enders Analysis Limited, its officers, employees and agents and any entity which directly or indirectly controls, is controlled by, or is under direct or indirect common control with Enders Analysis Limited from time to time, against any direct or indirect loss or damage or any other costs or expenses of any kind which they may incur directly or indirectly as a result of the recipient’s use of this note.

© 2014 Enders Analysis Limited. All rights reserved. No part of this note may be reproduced or distributed in any manner including, but not limited to, via the internet, without the prior permission of Enders Analysis Limited. If you have not received this note directly from Enders Analysis Limited, your receipt is unauthorised. Please return this note to Enders Analysis Limited immediately.

7 | 7 Case study: Vice August 2014