Arab Press

بالشعب و للشعب
Sunday, May 05, 2024

The lessons that can be learned as Vice joins digital media casualty list

The lessons that can be learned as Vice joins digital media casualty list

Sky's Ian King says Vice, which is set to fall into the hands of its creditors, did not get to grips with the changing needs of its audience.

The tech sector is used to seeing companies lurch from boom to bust in a very short space of time.

Seldom, though, has there been as dramatic an evaporation of value as the one experienced at the digital media start-up Vice.

From a peak valuation of $5.7bn, in 2017, it looks set to be picked up for just $225m after filing for Chapter 11 bankruptcy protection.

It is quite the comedown for a business founded in 1994 in Montreal as a punk magazine and which, at the height of its popularity, employed 3,000 people around the world while owning an ad agency, a film studio, a cable network and a record label.

It even bought a pub, the Old Blue Last in Shoreditch in east London, where the likes of Amy Winehouse and Arctic Monkeys played secret gigs.

Along the way, it garnered some impressive names on its shareholder register, including the UK advertising giant WPP.

Rupert Murdoch's 21st Century Fox acquired a 5% stake in the company for $70m as long ago as August 2013, while another shareholder was Raine, the merchant bank currently advising the Glazer family on its sale of Manchester United.

The most eye-catching investments, though, were made by Disney, which put in around $400m, most of it in 2015 and 2016. It eventually emerged with a 26% stake in the business whose value it wrote down to zero in 2019.

All were attracted by a business whose gonzo-style video journalism from trouble spots such as North Korea convinced many people that it had found a way to attract the sought-after young audiences that established media brands could not.

Vice had a peak market value of $5.7bn.


Mr Murdoch himself tweeted in October 2012 that Vice was "a wild, interesting effort to interest millennials who don't watch or read established media".

Unfortunately, it was that very empathy with millennial audiences that proved to be one of the factors behind the downfall of Vice.

The most obvious factor that hurt all of these businesses was a shift in the market that saw the lion's share of digital advertising revenues vacuumed up by the likes of Google and Facebook.

But another was that what appealed to millennials did not appeal to the subsequent Gen Z audience.

They opted instead for alternative platforms like TikTok and Snap. It is thought that Gen Z audience, rather more clean-living - some would say puritanical - than the Millennials, were repelled by aspects of Vice.

Rupert Murdoch was among investors at Vice.


The group's 'bro' culture was very much driven by the personality of its co-founders. These included British-born Gavin McInnes, who later went on to achieve notoriety as a founder of the Proud Boys, the far-right organisation implicated in the storming of the US Capitol on 6 January 2021.

He, though, left in 2008.

In more recent times, the culture was set by another co-founder, Vice's former chief executive Shane Smith, who famously quibbled with a report in 2016 that he had spent $300,000 on a single dinner in Las Vegas, telling the Wall Street Journal: "It was $380,000, plus tip. I broke the Vegas tip record."

Almost inevitably, that 'bro' culture turned out to be indicative of something much worse, with the New York Times reporting on accusations of sexual misconduct in the company at the end of 2017. Two of its executives were suspended as a result and subsequently left the company.

By the beginning of 2018, investors were becoming frustrated at Vice's inability to make a profit from its large online audiences, while Mr Smith stepped down as chief executive in favour of Nancy Dubuc, a former broadcasting executive, who took steps to try and clean up the workplace culture.

The company became locked into a spiral of staff redundancies, followed by more declines in audience, followed by more redundancies. Costs were cut aggressively - even the Old Blue Last was sold - but profits remained stubbornly unattainable and particularly after the constraints of operating during the pandemic took a toll.

Ms Dubuc left in February this year, by which time, Vice was already being hawked to prospective buyers.

Vice is not the only digital media start-up to lurch from a crazy valuation to almost nothing.

Buzzfeed is another big name to have lost ground, closing its news operation


Buzzfeed, which earlier this month closed its news operations and laid off 15% of its staff, has also suffered a big drop in its valuation as it soldiers on.

Vox Media, another scrappy new media start-up, has also laid off staff and in February this year fell into the arms of Penske Media Corporation, owner of established media titles such as Variety and Rolling Stone.

Business Insider and Politico, two more digital news start-ups that successfully built strong reputations, have been bought by another established media player in Axel Springer, owner of Bild and Die Welt, two of Germany's best-selling newspapers.

In the meantime, some older media titles are flourishing, thanks partly because their revenues are driven by subscriptions as well as advertising.

In the US, the New York Times has even bought a media start-up of its own in the shape of The Athletic, a sports-focused publication.

The Boston Globe has begun trading profitably since being bought by John Henry, the owner of Liverpool FC, thanks to some buoyant digital subscription revenues. And in the UK, The Times is making a sustained profit for the first time since it was bought by Mr Murdoch in 1981, again driven by strong digital subscriptions and award-winning journalism.

All of which shows the value of providing scintillating content that paying subscribers want to read and, perhaps, of having plenty of so-called 'brand equity'.

Yet the success of those titles - other examples include the Financial Times and the Wall Street Journal - has been hard-earned and is not being replicated everywhere.

The Washington Post, which has been owned by Amazon's founder Jeff Bezos for a decade, has been laying off staff and is widely reported to be up for sale after suffering falls in both circulation and subscription revenues.

The LA Times, owned for four years by the biotech billionaire Patrick Soon-Shiong, has lagged its rivals in terms of building subscriptions.

As for Vice, about to fall into the ownership of its creditors, it can at least point to having exerted an enormous amount of influence over the wider media industry.

It forced everyone from the BBC down to re-think their approach towards packaging journalism for a younger audience.

It also, however, provided a text-book example in how not to grow old with your readers, viewers and listeners.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Netanyahu's Firm Stance Amid Rafah Hostage Talks
Blinken on Gaza: Ceasefire is Key to Humanitarian Crisis Resolution
UAE Prime Minister Announces $544M for Home Repairs after Historic Rains, Vows to Learn from Experience
Isfahan Explosions: US Media Reports Israel's Retaliatory Strikes on Iran
Four Dead, Dubai Airport Disrupted: UAE's Heaviest Rains in 75 Years Cause Flooding and Flight Chaos
Dubai Airports: Stranded Tourists 'Living on Duty Free,' Desperate for Food and Water
Heavy Rains Cause Flooding in UAE and Oman: 18 Lives Lost
You can be a very successful player, but a player with character is another level!
Unprecedented Flooding Disrupts Dubai
Ajman Crown Prince Declares Remote Work Day for Government Employees Due to Weather (Except Essential Jobs)
IDF released footage showing Israeli fighter jets downing some of the 300 drones and missiles fired from Iran at Israel.
The West stands with Israel, Iran is furious: "Double standards and irresponsibility"
Huge Queues at Iranian Gas Stations
Stabbing rampage terror attack in Sydney, at least four people killed, early reports that a baby was among those stabbed.
Scandal in Iran after a goalkeeper had the audacity to hug a female fan who stormed the pitch
Iran fired more than 300 drones and missiles at Israel overnight. Israel Reports Light Damage After Iran Launches Large Strike.
Saudi Arabia calls for "restraint" amid Iranian strikes on Israel
Iran launched dozens of drones at Israel on Saturday but they will take hours to reach their targets, Israel's military said
Online YouTube streamer N3ON was just sentenced to AN ENTIRE YEAR in prison in Dubai for filming and live-streaming, without “proper permits”
UN Chief Warns: Gaza Outflow to Egypt Would Derail Israeli-Palestinian Peace
Record Number of Arab Soldiers Serve in IDF Amidst Ongoing Gaza Conflict: A Personal Story of Loyalty and Advocacy
Major Charities Warn of Genocide in Gaza: 'Impossible' to Deliver Aid, Israel Accused of Complicity
Biden Warns Netanyahu: US Aid to Israel Depends on Gaza Civilian Protection
Israel Reopens Gaza Border for Temporary Humanitarian Aid Amid International Pressure
United Arab Emirates suspends diplomatic relations with Israel
DOZENS OF ARMED FIGHTERS ATTACK 3 IRANIAN MILITARY FACILITIES
Qatar PM: Displaced Palestinians Key Issue in Gaza Ceasefire Negotiations
Palestinian Authority Seeks Renewed UN Membership Amid Reforms and International Pressure
Gaza Crisis: Soaring Newborn Mortality Due to Malnutrition and Destroyed Health Facilities
World Bank: $18.5 Billion in Damages to Gaza's Critical Infrastructure and Economy
Iran: Two Generals, Five Officers Killed in Israeli Strike on Syrian Consulate
Israel Passes Law to Potentially Ban Al Jazeera Amid Conflict with Hamas
Turkish local elections: Opposition stuns Erdogan with historic victory
Israel Must "Ensure Urgent Humanitarian Assistance" In Gaza: World Court
Saudi Arabia To Participate In Miss Universe Pageant For 1st Time Ever
Court ruling effectively outlaws Islamic schools in India’s most populous state
"War Crime" Warning by Macron to Israel on Gazans' Forced Transfer
Senior Hezbollah Official Makes Landmark Visit To UAE: Report
Gaza's catastrophic food shortage means mass death is imminent, monitor says
Over 13,000 Children Killed in Gaza, UN Agency Reports
Israeli PM approves Rafah operation plan
Islamic call in British parliament today.
Thai Muslims perform the Taraweeh prayer during the holy month of Ramadan
South Africa announced that Israeli soldiers holding South African citizenship would be arrested upon entering the country
In a Misguided Critique, Jewish US Official Asked to Respect Local Traditions in Saudi Arabia
The Indian government is demolishing mosques as part of the religious war taking place there.
Biden: Netanyahu causes Israel more harm than benefit
Turkish President Erdogan Says March Elections Will Be His Last
Being racist is a full time job
Indian police officer kicks Muslims during their prayers
×