26 Feb 2024 | Ella Sagar

Vice’s pivot to studio model is ‘big loss for media’

Vice group co-CEO Bruce Dixon has announced that the company is to make several hundred lay-offs and will no longer publish content on Vice.com.

In a memo to staff, Dixon said that Vice will “look to partner with established media companies” to distribute its digital content, including news, on their global platforms and “fully transition to a studio model”.

He added that it was still in “advanced discussions” to sell the business, with more announcements on the latter expected in the coming weeks.

Vice describes itself as “the world’s largest independent youth media company” with offices in 35 cities and five units: Vice.com, Vice Studios, Vice TV, Vice News and Virtue. The company’s portfolio also includes Refinery29, Pulse Films and i-D.

It is unclear at this stage whether the lay-offs will affect all parts of the company, although the memo noted specifically that Refinery29 will remain a standalone brand.

Analysis: Loss for the industry

Michael Brown, managing partner and UK and EMEA head of insight and research at UM, told The Media Leader: “Vice going offline is a big loss for media and it marks a concerning continued trend towards alternative media environments becoming commercially unviable — and, therefore, our media landscape becoming less interesting.” This was a theme that Brown explored last year following the closure of gal-dem.

Goodbye from gal-dem: a call to action for the media industry

He added that while the brand’s corporate evolution “inevitably impacted some of the title’s edge”, it was lauded for often highlighting unseen and pressing aspects of minority communities’ lived experiences.

Brown continued: “We have delivered for our clients many successful partnerships with Vice over the years. Their team past and present should feel proud of what they have created and reported.”

Dino Myers-Lamptey, founder of The Barber Shop, said: “Vice’s undoubted success was often too edgy for advertisers and, unfortunately for them, it inspired the model of news, views and insights from the people closest to it that eventually made it impossible for them to compete against.

“This world lives on TikTok, Instagram Stories and YouTube shorts, and sadly the economics of it just don’t work for publishers.”

Pedro Avery, co-founder of Bicycle, agreed: “Their ‘edgy’ style lost its novelty factor. Younger audiences gravitated towards more authentic content found on platforms like YouTube and especially TikTok — alongside these platforms becoming homes for creators.”

Vice’s decline, according to Avery, shows that large audiences and even cultural impact “do not automatically translate into profitable businesses” and the company “struggled to turn viewership into reliable advertising and subscription revenue, especially within the highly competitive news space”.

The over-reliance on Meta and YouTube for distribution and monetisation, Avery suggested, meant Vice was exposed to algorithm changes and reduced revenue shares that squeezed profit margins — as was the case with many other digital media companies.

Meanwhile, the diverse arms of the business led to Vice having “a less cohesive identity”. This was further impacted by allegations of workplace misconduct and sexual harassment that “tarnished their image”, he noted.

Avery remarked that while Vice’s collapse “isn’t a seismic shift that will entirely reshape the media industry”, it raises the prospect that investors may become more cautious in funding digital media ventures. Other implications include the value of niche targeting; the focus on sustainable business models; and the importance of company culture.

Avery concluded: “The media landscape changes with shocking speed. Vice’s decline shows the importance of continually evolving distribution strategies, content formats and monetisation models — something older, traditional media companies are also struggling to do.”

Analysis: Punk beginnings

Vice was launched in 1994 in Montreal by Shane Smith, Gavin McInnes and Suroosh Alvi as an alternative magazine called Voice of Montreal, which later developed into Vice, with divisions for a printed magazine, a website, broadcast news, film production, a record label and publishing imprint.

Avery said: “They found immense success by catering to a specific audience: young, edgy and often counterculture. This allowed them to build a very loyal following.

“Their content was provocative and raw, and they embraced a DIY aesthetic. Initially, it stood apart from the polished feel of traditional media.”

Early pioneer

Avery added that Vice was an “early pioneer in online content” and built a substantial presence across many video and social media platforms, as well as “aggressively” expanding into diverse verticals like news, documentaries, music and online publications to give the brand “a wide footprint”.

Its rise coincided with other digital-first publications like BuzzFeed and HuffPost in the 2000s and 2010s, as well as social media and video-sharing platforms Facebook and YouTube.

Myers-Lamptey called Vice “the original misfit, provocateur and troublemaker in news” that turned things upside down and told stories from often unheard perspectives, all without Photoshop touch-ups or a political agenda.

“It paved the way for raw, unfiltered user-generated content and gave a platform for the lesser-known journalist who showed the way for influencers and content makers that have emerged and dominated since,” he explained.

Consolidation anticipation

In what now seems a prophetic discussion, at Dmexco in 2016, Smith told then WPP CEO Sir Martin Sorrell that consolidation in digital and traditional media “was only going to get worse” as “massive power” falls into the hands of online giants.

VICE CEO: ‘Consolidation of media will get worse’

Smith said: “What I’m concerned about is that you already have two companies that control 75% of the market in video and mobile, then you have a further consolidation happening in television and mainstream media, and a lot of smaller companies are getting pushed to the wayside.

“Whoever’s last in mainstream media will partner with whoever’s left in digital media — and I think a lot of people in the next 12-18 months are just going to go away.”

Smith also pointed to changing algorithms, bots, ad-blocking and programmatic as huge pressures on publishing businesses, adding that Vice’s move into TV, online and mobile was down to the fact that it realised it had to be platform-agnostic and “couldn’t be hostage to Facebook and YouTube and the big players”.

Financial troubles

Avery described Vice as “a poster child of the optimistic period when digital media companies were getting massive valuations”, based on the promise of disrupting traditional media.

In 2017, the company was valued at $5.7bn. Last year, it was reported that this figure had dropped to under $1bn.

Acquisition target Vice Media was the future once. What now?

In 2018, Smith left the business and was succeeded as CEO by Nancy Dubuc. She was replaced in February 2023 by then chief financial officer Dixon and chief strategy officer Hozefa Lokhandwala.

In April 2023, Vice cancelled its flagship show Vice News Tonight and made “painful” restructures to the company, including lay-offs.

In May, Vice filed for chapter 11 bankruptcy in the US and was acquired by a consortium led by Fortress Investment Group, one of its investors, the following month for $350m, alongside a $30m loan to keep it afloat during the sale.

At the same time, BuzzFeed, HuffPost and Insider all had difficulties with revenues and valuations.

BuzzFeed cut 15% of its staff and shut its news division in the past year. HuffPost, which BuzzFeed has owned since 2020, also experienced redundancies.

Insider, the parent company of Business Insider, announced plans to lay off 10% of its US staff in 2023. This year, Business Insider informed staff that it planned to make 8% of its global workforce redundant.