Where most newspaper and traditional media companies have struggled, few of the players who have adapted themselves to the Web have found a lucrative business model. One such company is New York-based Vice Media which is cashing in on online, and specifically, video streaming content to become one of the leading players in the space.
Vice Media was founded by Suroosh Alvi and Shane Smith and began life in Montreal as a free magazine that was best known for their provocative attitude. Today, the company is best known for their ability to integrate modern day punk culture with traditional journalism in an online network that streams original content, 24 x 7. The content on the network includes both domestic and international news on current affairs as well as pop and underground culture, music, and technology. Their content is viewable not only on multiple technology platforms, but also on social networks.
Unlike traditional news channels, Vice is more youthful in its services. Their journalists are young reporters who file adventurous stories, such as those of snake-infested Brazilian forests, to attract young male viewers. Vice has successfully figured out how to make the news business profitable by exploring all possible business opportunities. Instead of focusing on banner-based advertisements, Vice has also managed to establish a strong presence within video advertising. Their advertising model is a success mainly because their content is tailored to the demographic that the advertisers wish to address.
Their main YouTube channel boasts of 4.4 million subscribers and their new Vice News channel has nearly 236,600 subscribers. They have 35 offices worldwide and have so much TV programming that they are now evaluating the option of buying a cable channel for themselves.
Besides Web video, Vice still publishes their print magazine, runs a music label, and produces a non-fiction TV series for HBO. They also act as an in-house ad agency for their clients and pursue branding opportunities besides traditional advertising models.
Unlike other new age companies, Vice is estimated to have very strong financials. In a report published in 2012, the company was estimated to have revenues of $175 million with profit margins of 34%. More than 80% of their revenues were derived from the Web. They are expected to be operating on an annual revenue rate of $500 million this year and expect to achieve $1 billion in revenues and a profit margin of 50% by the year 2016.
Vice is venture funded with investments of $80 million from private undisclosed investors and Rupert Murdoch’s Fox, Inc. Their last round of funding was held in August last year when they raised $70 million from Fox at a valuation of $1.4 billion. Vice estimates their valuation is now in “tens of billions of dollars” and is considering an IPO soon.
We’ll find out once the S1 is filed!