FROM HIPSTER HYPE TO FINANCIAL FLOP: VICE MEDIA, RIP:
The company did things that might have sent a guy called Trump to jail — at least 25 years ago. Like paying someone to pretend he was an MTV executive interested in a show to mislead a reporter profiling the company. Or having Vice employees bring friends with laptops to pose as workers.
Vice was accused of using hidden techniques to artificially inflate its audience numbers. According to one of Smith’s former girlfriends, “Shane would talk all the time about how stupid people were for giving them money.”
After being warned by a Vice employee of the company’s sizzle minus the steak, one investor replied, “You were totally right, but the story is good, and we’re just gonna pass it on to the next guy.”
An early, important investor was my ex-boss, Rupert Murdoch, whom Smith reportedly told, “I have Gen Y, I have social, I have online video. You have none of that. I have the future; you have the past.”
It worked. Murdoch invested $70 million in 2013, pushing Vice’s valuation to $1.4 billion.
A few months later, I noticed a problem. At the time, I ran FoxNews.com and was looking to boost our social media presence. Analyzing other media outlets, it became apparent to me that Vice’s Facebook numbers were inflated to the point of nonsense. The company had millions of supposed followers, but its posts generated a tiny number of comments and interactions. It was a clear sign of either bot accounts or, more likely, overseas “users” who would follow a Facebook page for pennies.
Since the boss had just dropped $70 million, I thought I should give him a heads-up. After a meeting, I mentioned what I had found to Rupert, summarizing it as “they’re full of s**t.”
I expected him to be perhaps a tad bit worried, but that wasn’t in Rupert’s DNA. He just chuckled and said, “Of course they’re full of s**t.”
The next year, a venture-capital firm and A&E invested $500 million, raising Vice’s valuation to $2.5 billion. By 2017, another $450 million investment pushed its worth to nearly $6 billion.
Money like that buys a lot of video production, articles, and audience. With it, Vice spawned two feature film studios, a publishing arm, a cable TV channel, and more.
All gone.
Related: How the cult of Vice came crashing down.
For young people trying to break into TV, pitching to every other media outlet, from the BBC to Channel 4, felt like an endlessly demoralising grind. Patronising boomers would asphyxiate any remotely fun idea you dreamt up. Meanwhile, Vice was covering cannibal warlords in Liberia and sending reporters to see what it was like to do stand-up comedy on acid. It even had a dedicated drugs correspondent called Hamilton Morris!
Vice’s genius strategy was to offer salaries way below industry standard to hungry young journalists and filmmakers. This meant that its offices were packed to the rafters with privileged kids who were happy to pass up a decent pay cheque in exchange for the infinitely more valuable social currency of working there. To pick just one example, Hamilton Morris was the son of Academy Award-winning documentarian Errol Morris.
At its height, Vice was the most contrarian and unconventional publication out there. Much of this is owed to co-founder Gavin McInnes. He fell out with co-founder Shane Smith and left Vice in 2008, long before I was trying to become part of the cult. Still, it was undoubtedly Gavin’s irreverence that gave the magazine its unique flavour. When it launched its British edition in London in 2002, McInnes said: ‘We will have no taboos. Vice has never been about shocking people, we’re just shocking in nature.’
By the 2010s, that punk attitude forged by McInnes had attracted huge corporate interest. The style was re-packaged and sold to advertisers for millions, via its in-house creative-services agency, Virtue. I made some adverts for the commercial arm. This was a far more cut-throat operation than the gonzo magazine.
Other creative agencies at the time would take a brief from a brand and then eagerly pitch in their little ideas. In contrast, Vice sales staff would swagger into boardrooms and make stuffy corporate execs feel so uncool that they would simply pay for whatever Nathan Barley-esque nonsense the gold-ring wearers had dreamt up at 1am the night before above the Old Blue Last. Such was their cultural cachet that, for a period, Vice sales staff convinced the entire consumer-goods market that they had discovered a Rosetta Stone to translate corporate messaging into youthspeak. Naturally, they charged through the nose for this.
Eventually – inevitably – the money took over. Investment flooded in from the likes of Rupert Murdoch’s 21st Century Fox, the Walt Disney Company and private-equity firm TPG Capital. Like many other online media platforms, Vice struggled to turn this into profit. The multiple #MeToo settlements it faced didn’t help either. Amid its financial struggles, it signed a deal with Mohamed Bin Salman’s regime to make films promoting Saudi Arabia. Meanwhile, editors repeatedly blocked stories that might offend the Saudi government.
h/t Ed Driscoll