When Vice Media decides to list its shares on a stock exchange, possibly in the not-too-distant future, much attention will be placed on its brash successful founder and CEO, Shane Smith.

And for good reason. Smith's tale of turning a Montreal punk-rock fanzine into a global television and digital media company with revenue of nearly $1 billion is a story of vision and chutzpah.

Yes, Smith has been a great salesman, and his insistence that Vice remain edgy and provocative has allowed his company to stand out among the relatively recent wave of news and entertainment sites such as Vox Media, BuzzFeed and Mashable as well as older brands led by Viacom's (VIAB) MTV and magazine stalwarts such as Rolling Stone

But in the past five years, Vice has become much more than Smith.

These days, Vice has 2,500 employees worldwide split between its Brooklyn, N.Y., headquarters and 30 international offices from which it operates 13 entertainment and lifestyle sites that include Vice.com as well as Noisey, Motherboard and Munchies, platforms that the company likes to call "digital channels."

Vice operates local versions of its flagship site in France; Germany; Brazil; China; Mexico City; Bogota, Coliombia; Indonesia; and elsewhere.

Owing to nearly $1 billion raised from Disney (DIS) , Hearst, 21st Century Fox (FOXA) and Silicon Valley's Technology Crossover Ventures, an early investor in Netflix (NFLX) and Facebook (FB) , Vice also produces an evening news show for Time Warner's (TWX) HBO in addition to a weekly news magazine, in its fifth season, as well as assorted special reports.

Most ambitiously, Vice launched a 24/7 cable TV network, Viceland, a year ago with A+E Networks as a partner, capping a very expensive bet on high-quality video (as distinguished from short-form snippets found just about everywhere).

"The big win is if a media company really builds a full multiplatform business model," said Peter Csathy, founder of Los Angeles strategy and investment group CREATV Media. "Vice started off in print, then went digital and then went into the more traditional space of television -- so it's got a lot of bases covered."

Vice's strategy is built around getting paid numerous times for content it owns and repackages, and to give advertisers the ability to market their products across multiple platforms: TV, mobile and desktop. On the programming side, Vice sells to Verizon (VZ)  for its Go90 mobile-TV platform, while it licenses Viceland for France's Canal+, the U.K.'s Sky and SBS in Australia. More extensive multiplatform deals have been signed with wireless operators such as NTT DoCoMo (DCM)  and AbemaTV of Japan.

In the coming months, Vice expects to launch digital sites in India and the Middle East to go along with partnerships with The Times of India and Dubai's Moby Group, both eager for news and entertainment that can attract and retain subscribers, especially young subscribers.

"The fact that Vice is making content that works across multiple platforms, selling it to ancillary markets, is a sign of a healthy company," said Ian Schafer, founder and CEO of New York digital advertising agency Deep Focus. "The value of Vice isn't their digital audience; it's their linear and nonlinear content, the quality of their video content."

For Vice, television has ironically become a hedge against digital. That's because Facebook and Alphabet (GOOGL) , owner of Google and YouTube, are consuming 58% of all U.S. digital ad spending online and on mobile devices, according to eMarketer. Facebook and Google have become something of a duopoly, leaving all other media companies to find a viable niche or risk bankruptcy.

While Vice does have a partnership with soon-to-be-public Snap, its traction pales in comparison with that of Facebook and Google.

For that reason, Vice decided to use many millions of its investors' dollars to launch Viceland almost exactly a year ago.  Television remains the largest category of advertising spending despite digital's rapid rise in recent years, Standard Media Index announced last month.

From a humble beginning in a short-lived partnership with Viacom (VIAB) on MTV2, Viceland has gained carriage on all major pay-TV platforms as well as digital sites such as Dish Network's (DISH) Sling TV. Vice's embrace of video is a bet that its brand of hip and irreverent content can distinguish the company from Facebook and YouTube. 

"When you look at opportunities for reach in digital video, you really start at Facebook and Google, and then it really falls off a cliff," said Patrick Keane, the New York-based president of native advertising exchange Sharethrough. "All these content makers are ambitiously trying to be competitive against the duopoly of video power. Vice, to its credit, has very effectively been able to sell the idea of 'cool' to advertisers and agencies over the past five or six years."

Ten years ago, a new generation of digital-only media companies was winning over venture capital investors, securing millions of dollars for businesses that promised to connect with young, hip consumers of entertainment, news, culture and lifestyle. They included BuzzFeed, Vox Media sites The Verge, Eater and Recode as well as Mashable, Medium, Gawker (pre-Hulk Hogan), the Huffington Post and Vice. 

It was a gravy train moment for editorial-based startups able to produce engaging content, mostly in text and short videos of varying quality, that could drive traffic at a low cost from social media platforms. Using that traffic, the sites then could sell advertising, both native and branded, to corporate clients. The business model was all about aggregating audiences.

But over the past 12 to 18 months, that business model has shown signs of cracking.

To the detriment of everyone else, Facebook and Google have shown that if an advertiser really wants scale, their platforms are unbeatable. Facebook's audience has ballooned to more than 1.7 billion monthly users with more than 80% of its ad revenue in the fourth quarter coming from mobile advertising, a huge jump from 23% during the same period a year earlier.

To survive, digital publishers are having to scramble to produce more video to attract advertisers as well as consumers. The unanswered question is whether recent moves are too little, too late. 

Medium, the long-form journalism site that has raised more than $130 million since launching in 2011, said last month that it was reorganizing its company to produce more video for a subscription product aimed at making the company less reliant on advertising. Some 50 Medium employees were laid off in the process.

In October, Comcast's (CMCSA) NBCUniversal doubled down on BuzzFeed, investing yet another $200 million in the news and lifestyle website a month after it split into an entertainment group and a news group explicitly to produce more video. The new load of Comcast money valued BuzzFeed at roughly the same amount as a year earlier, Recode reported.

Vox Media, which also raised $200 million in late 2015 from NBCUniversal, has made a series of executive changes this year focused on expanding its video-producing operations in an effort sell more native and branded advertising. Earlier this month, Vox named its first chief operating officer to help spearhead its dive into online video and further grow Concert, the digital ad sales group it operates with NBCUniversal that produces content across a myriad of sites.

The list goes on. 

Mashable, which had raised about $50 million from investors that included funds from an investment arm of Time Warner, laid off about 30 editorial staffers in April while announcing a shift into video and away from extensive political and international news coverage. The Huffington Post similarly downsized while emphasizing video production to attract both advertisers and viewers. 


For businesses sustained by corporate and venture capital investment, the ability to produce compelling video may determine whether they go public, get acquired or fizzle out.

"There's tens of millions of dollars pumped into these companies, and in this digital-video first world, they certainly all have value," Csathy add. "But all of them are under tremendous pressure right now to show a real monetization path, and some have significant pressure to find exits for their investors." 

Vice's deep dive into television would seem to be a strange decision considering that the traditional 100-plus-channel pay-TV bundle is losing subscribers at a rate of about 1% to 2% per year. Pay-TV operators are looking for ways to carry fewer channels, keenly aware that subscribers want greater choice rather than bloated channel packages.

The Esquire Network, co-owned by Hearst and NBCUniversal, will become digital only this summer after it was dropped by Dish and AT&T's (T) DirecTV and U-verse, the latest casualty in the move to skinnier bundles.

To be sure, Vice is private, and until its books are open to public eyes, it's unclear whether its multimillion-dollar investment in video is working. As has been widely reported, Vice's revenue totaled between $700 million and $800 million in 2016, while it top-line number this year is expected to reach $1 billion.

Disney has become Vice's largest outside stakeholder, with a roughly 19% position following a $400 million investment in late 2015 that valued the company at more than $4 billion, according to the source. Hearst's position is roughly 4%, followed by 21st Century Fox and other investors, including global ad agency WPP (WPPGY) .

"TV is just the latest move in our mission to deliver Vice programming to viewers wherever they may watch it, from digital, mobile and linear, to film and virtual reality," Vice said in a statement. "Our TV play has not only fueled our content creation engine and our growing library of IP, but it's also helped drive our international expansion." 

While Viceland is the company's largest single investment, Vice has sought to downplay the importance of its Nielsen ratings, which remain low, arguing the network is a production house that makes content that can be sold to pay-TV operators around the globe. 

To that end, Vice's international expansion in 2017 calls for Viceland to be carried in 40 or more countries, extending a television footprint at a time when most media companies are focused on aggregating digital audiences.

"The digital audience is worth less today than it was yesterday, and much less than a year ago," Schafer said. "With Facebook closing in on 2 billion monthly users, why should advertisers go anywhere else? Vice's answer is, 'We offer something unique.'"

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