About two years ago, I came across a short documentary on Youtube about escaping North Korea. Unlike most other documentaries, this film was about 30 minutes long and did not contain much information about Korea’s political situation, its history or socio-economic realities. Instead, it focused on two girls crossing the border to China and let the audience submerge themselves in this thriller.
Fast forward to 2014 and vice media, the organization that produced the documentary, is on its way to becoming a massive media empire. This September, the organization secured $500 million from two minority investors to fund dozens of new videos. The investments came from a Silicon Valley firm named Technology Crossover Ventures and A+E Networks, a US cable broadcaster. The investment puts the company at a $2.5 billion valuation. So why is Vice creating so much noise in an industry dominated by massive conglomerates?
Vice Media started in 1994 as a magazine that dedicated itself to reporting what other news organizations were not reporting. Since then, their immersionist journalistic style has set them apart from competitors like CNN, FOX news and others. Vice is the only organization that will send their journalists to highly dangerous regions and report from the perspective of the locals. Unlike their competitors, Vice does not have to follow set standards for journalists, which allows them to be first on the scene and get inside access to informants. This was the case during the Israeli Palestinian conflict, and it is the case now, as we focus on the fight against ISIS.
The fact that they distribute their content online has also really helped the growth of the organization. This eliminates the distribution cost almost entirely, while giving them access to the fasted growing audience: online video consumers. The majority of their money is invested in increasing production value to a level that competes with the largest news organizations. In a time when media convergence is a reality everyone is facing and increased competition from online media is destroying small news organizations around the world, Vice has found a way to play in the big leagues.
How exactly is vice going to change the way you watch news? First, everyone will copy Vice Media’s model. Cheap distribution costs, and high production value with little legal restrictions is what has allowed the organization to blossom. Imagine a world where production companies start working with established media organizations to produce this sort of gonzo information. Second, as people start producing information like this, it will allow for more diversity of information. One of the reasons why we get so little variety of information is because the same conglomerates own most news organizations. Therefore, it should be no surprise that Bloomberg recognized the potential of Vice by making a $70 million investment to acquire 5% of the company. Nevertheless, the company remains independent, proving that Vice Media’s model has the potential to break the oligarchy in the media business.
As Vice Media contemplated an IPO in the near future, it will be interesting to see if the company can remain as relevant while also generating a large viewership and keeping shareholders happy. When all is said and done, media- like any other businesses- are subject to the realities of our capitalist system. Thus, the organization that was founded on counterculture principals will have to find a balance between its needs and the shareholders needs.
Edited on January 24, 2015.
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