Vice Media aims to hit a billion after drinks with Murdoch at New York bar
Vice Media, a company that combines punk culture with online journalism, is poised to double revenue to $1 billion by 2016 and may pursue an initial public offering, co-founder Shane Smith has said.
Vice media: Going for gold!
The company, backed by billionaire Rupert Murdoch, expects to reach that mark in 12 to 18 months, with profit margins targeted to widen to 50 percent of sales from 34 percent now, Smith, 44, said in an interview with Bloomberg TV.
Vice Media attracts a male viewer coveted by Web and TV advertisers, said the report. Examples: young, sometimes tattooed reporters filing stories from a snake-infested island off Brazil or the civil war in the Central African Republic.
The growing online, mobile and TV business could have a market value equaling Twitter's $28.9 billion if Vice Media goes public, Smith said.
“We’d be stupid not to test what the market would bear,” said Smith, who is chief executive officer. “There’s a lot of money sloshing around in the system, obviously valuations are high.”
Vice Media, based in New York, supplies news and entertainment online to young audiences. It sells a programme to Time Warner's HBO and produces “The Vice Guide to Everything” for Viacom Inc.’s MTV.
Reporters file stories that shun conventional journalism rules and often include profanity, said Bloomberg. In one episode on MTV, they sneak into North Korea as tourists and hang out with a Russian mobster.
Murdoch’s 21st Century Fox acquired about a 5 percent stake in Vice Media last year, according to Smith. The price was $70 million, Fox said in a regulatory filing, suggesting a valuation of $1.4 billion. The investment came after Smith and Murdoch, 83, chatted over drinks at a bar in Brooklyn. Murdoch’s son, James, sits on the company’s board.
“One of the reasons we did the Fox deal was to stay independent, so we could run the business the way we wanted to run it,” Smith said. “I vote 95 percent of the board, so it was a great deal for us. And it’s helping us expand into India, Europe, South America.”
Vice Media started out as a small punk magazine in Montreal in 1994, then moved into video after making its content available online. Its events and programs draw sponsors including Intel Corp., AT&T Inc. and General Electric Co.
The company produces the HBO show “Vice,” which provides reports from areas of conflict around the world. Conventional media outlets struggle to reach its young male audience, Smith said. Vice Media’s main YouTube channel has 4.4 million subscribers while the newer Vice News has 236,597, according to the website.
“We have the demo that everybody wants, the one that’s growing,” Smith said. “Advertisers want to get to them.”
Vice Media has 35 offices around the world. It’s expected to post revenue of $500 million this year, the Wall Street Journal said in January.
The company is producing so much TV programming worldwide that Smith is considering starting or buying a cable channel.