Shane Smith has hit back against criticism from broadcasters at the Edinburgh TV Festival for suggesting that media is derivative, broadcasters are just making what has been successful before, and millennials are underserved by hard-hitting content in a heated interview with Channel 4’s Jay Hunt.
Shane Smith, co-founder and chief executive of Vice, last night (24 August) delivered a warning to broadcasters to deliver the content that millennials are pining for or get culled in a world where only nimble and dynamic companies will survive.
“The baby boomers have had a stranglehold on media and advertising for an entire generation and that stranglehold is finally being broken by a highly-educated, ethnically diverse, global thinking, hard-to-reach generation — and media is having a hard time adapting to this rapid change”, he mused.
“Media today is like a private club. So closed that most young people feel completely disenfranchised. You have to hand it over to the kids.”
Ruffling broadcaster feathers
Unsurprisingly, Smith’s observations, which he shared with a room filled with British broadcasters have not gone down well, and executives took to the stage this morning (25 August) to voice their own discontent for his remarks.
In a leaders' debate session at the festival, BBC director of content Charlotte Moore ardently defended the UK scene, suggesting his comments would resonate better with an American audience. “In the US making that content is really radical and revolutionary,” she said. “They don't show films about climate change and women. It shows just how precious what we have in this country.”
Sky’s managing director of content Gary Davey, agreed: “We’re already doing a lot of what he’s advocating. There is a lot of that content in this country. If you combine public broadcasting and commercial content he has missed the point. We are already doing that.”
Shortly after Smith took to the stage with one such executive, Channel 4’s chief creative officer Jay Hunt, to defend his comments.
When asked to what extent his suggestion that broadcasters were not serving millennials with serious content was a critique of the British market, he argued "there is a long tradition of that sort of thing” and urged the whole indutsry to follow the lead of the few broadcasters he believes are trying to innovate.
“There are great companies out there and I said at the end the BBC has been doing a great job for a long time. Obviously Channel 4 is famous for its documentaries. But what I said is 'be honest', and I put myself in that too, ask yourself a question: 'are we making enough of this content?' And the answer for me was no and I think the answer for a lot of people out there is no, and that is backed up.”
He supported this with some statistics, claiming that global programming devoted to environmental issues is “sub two per cent”, and global programming against LGBT issues is “sub one per cent”.
“Now if one per cent of the people are doing it, you can say Channel 4 does it the BBC does it, bravo. I am not speaking to you, I am speaking to everyone else who isn’t,” he added.
The 'holy grail' of media
While Hunt was less convinced that any player can get young people to watch this kind of content in volume on TV, Smith suggested this can happen by getting on all screens simultaneously.
He said the “holy grail” of media is all screens, with native advertising that is sticky enough to get by ad blocking and DVRs. That all has to be in-house, he continued so that networks can own the means of production. Vice’s move into TV is part of his belief that “you have to be completely platform agnostic”.
“If you look at the economics of TV, that allows you to drive a very dense high-quality, high-amount, high-volume of content. If that content resonates with young people you can then take that content and do a lot of things with it. You can license it to mobile, you can license it to online, you can sell it, you can put it on your own platforms, you can do things with brands, you can sell the advertising against it, you can monetise it and then you take it globally. We did 58 networks [for Vice's TV channel] and have 50 mobile deals that mirror those networks.”
Hunt pointed out that when Smith talks about Vice being “the biggest fucking media company in the world” it is often about scale rather than quality of content. His response was that “you can’t scale unless you have quality content”.
“We believe that we have good content, important content that is just as good if not better than most people out there” he continued, pitting that against MTV which “is poorly run, has got terrible content and is losing its audience”.
“Should I not go after them and take their market share?” he questioned.
Changing of the guard
Asserting his view that Vice is the brand representing Gen Y, Smith said: “At some point we will be the MTV and people will be coming after us. There is a changing of the guard every generation in media and we are the changing of the guard for Gen Y.”
Meanwhile, Hunt quizzed Smith on the blurred lines between sponsored and non-sponsored content in native video advertising. She asked if there have been situations where Vice has bowed to a client’s best interest over journalistic integrity.
Smith's response was "not on news", but suggested this could happen in other content areas like food: "Have there been one or two cases, probably, but the majority of what we preach is that you shouldn’t do that as they [millennials] will sniff it out."
The mistake of moving BBC Three online
In his MacTaggart lecture, Smith joked about taking over control of the BBC. He told Hunt today that his first task in the job would be to “reopen BBC Three” off the back of what some media observers believe was the wrong call to move online last year. According to Thinkbox research, the BBC took a 20 per cent hit in its young audience with the shift, while its competitors got a healthy lift.
“As millennials get more purchasing power they buy screens...So I don’t know if I would have closed it down, I think I would have waited a little bit. If you have an asset that is that good what I would have done is partnered with Vice.”
Doing deals with the devil
Smith also hit headlines today for suggesting that selling Vice to Disney "makes sense for them and it makes sense for us” at a press briefing prior to his MacTaggart lecture.
He added: "And then I could finally say Rupert Murdoch doesn’t fucking own Vice."
He also addressed comments that Vice was doing deals with the devil. He said when you run a company “you have certain decisions you have to make”. For Vice that comes down to either an initial public offering (IPO), strategic alignment (like Instagram and Facebook), or staying private and finding a secondary market to dividend out the cash.
“There is no timeframe, this question has been there for the past four years. We haven’t done anything because there hasn’t been a media offering like Vice in a long time, so the only things we look at is what is a high profile offering that would be of the same level and would raise about the same money," he concluded.