There will be blood. So said Shane Smith, chief of digital empire Vice Media, and one of its co-founders, at the keynote MacTaggart lecture at the Edinburgh International Television Festival.
Dubbed “the barbarian at the gate” the day before in the Wall Street Journal, Smith warned, nay relished, the prospect of “a veritable fucking bloodbath” in the year ahead as he predicted old media and new media would take part in a frenzy of consolidation and merger. Far from any cerebral analysis on the future of the media, it felt like watching a trailer for Game of Thrones.
He’d tweeted before the speech:
That may have promised more than the Canadian journalist turned entrepreneur delivered, but his audience of TV executives – baby boomers as opposed to millennials – had to suck it up. He gave them rap; riffs on booze and hallucinogens; attempts at a Scottish accent (not bad); and much profanity as he veered off on various tangents before getting to his point: the kids are all right. They are the future. Change is good.
Smith is the guru with an “in” to Generation Y, the most sought-after demographic for media and advertisers. He is the man behind the Vice site and various other hip digital destinations, plus the Viceland TV channel, a news operation, a movie arm and book and music publishing enterprises. Current value: US$4.5 billion (£3.4 billion).
This has been built on the back of growing acclaim. Vice won two Peabody awards last year for a global scoop with the first inside coverage of ISIS and a documentary series about a hard-knocks school in Chicago. It also drew attention for a ground-breaking video about Labour leader Jeremy Corbyn in the UK (see below). Next week, Vice is up for three Emmys for Smith’s documentary on global warming, Gloria Steinem’s Women series and Spike Jonze’s Gaycation.
Big media has been scrabbling to get onboard. Disney has invested $400m in the last year and now owns 18% of the operation. And while Smith retains overall control through supervoting shares, he has been courted by other big boys – Fox has 5%, there were investment talks with Time Warner, and a while back he jilted Viacom, owner of the likes of MTV and Paramount.
Smith pointed to the coming bloodbath among these giants as a symptom of the change sweeping through the media:
The Hollywood Reporter last week was predicting Fox will bid for Time Warner and takeover CNN and become the largest news organisation. Time Warner will bid for Viacom as they don’t want Fox to take them over. Meanwhile Apple will bid for Time Warner and Tim Cook will also buy Netflix.
On Viacom, with whom Vice’s marriage in the 2000s was not happy, he cackled: “Viacom is imploding … a Shakespearean decline”.
Smith was more sombre on new media, saying much of it would go to the wall. Why?
The death of the 30 second commercial, dude. All the agencies know it. The basic funding for content is commercially dysfunctional. Platforms have to change their ad base. It’s the biggest single shift in new media history …
Ad blocking on mobile is now 60% and [falling traditional TV ratings] and Netflix and consumption on demand is really knocking the shit out of the traditional ad model.
He said Vice had stayed ahead of the game with its in-house ad agency, which produces “branded” content for marketers – “native advertising”, as he called it. There was much uncomfortable shuffling in seats as digital independents in the UK rely on outsourcing their ad sales to consultancies.
But in-house is Vice’s motto and it’s not so much content is king as content is key:
With fewer content sites and mainstream media buying up big scale and another economic downturn around the corner, everyone is confused.
He turned to how mainstream media news coverage had failed Gen Y, giving the example of CNN’s collusion with Trump in the US elections. There was a sharper intake of breath as he threw down the gauntlet to the audience:
The baby boomers’ stranglehold is broken. Let’s break the rules. Open shit up. The mainstream media is so closed to young people. Hand it over to the kids. It’s about language, tonality. You can’t fake this. Gen Y is the smartest, savviest, most sophisticated and educated one ever. They have an in-built bullshit detector, so don’t bullshit.
The problem is will you give $10m to a kid straight out of school. Mainstream media don’t do that. We do. A 23-year-old might run off to Mexico City with my production budget but most cases we get gold.
But when and how did Vice see the light?
When we stopped being the hipster’s bible … The idea young people were not interested in news is bullshit. They care. We changed our brand. Our business grew, our audience exploded, we made more money and more content …
Our research showed what was important to young people – music, environment, civil rights, inequality, social justice, gender equality and LGBT rights.
Don’t be derivative, was his message – American Idol, The X Factor, home improvement shows … forget about it. Gen Y is now taking over: culturally, socially and economically.
Smith said producing content the kids wanted to consume was a virtuous circle – make the right content, your audience grows, awards roll in and you make more money to make more content, more licensing, more brands, more consumer relationships and more money. With the scale of Vice’s success in recent years, it certainly feels like he has a point. Will the old guard be able to do something similar? Their investment in Vice suggests they are far from optimistic.