Vice x Refinery29: can they consolidate culture, creative and commerce?
Vice Media acquired Refinery29 on Wednesday afternoon (2 October) in a $400m deal, absorbing the women's media brand into its stable. So why so soon after shutting its own female-facing brand, Broadly, has Vice bought another one?
As prophesised by BuzzFeed founder Jonah Perretti back in 2018, digital media giants like Vice, Vox Media, Group Nine and Refinery29 have indeed begun to consolidate their offerings to fortify the millennial-facing publishing business.
In the last year, we’ve seen Vox Media buy New York Magazine; BuzzFeed, Group Nine Media and Insider form a video ad alliance to optimise their businesses; UK newsbrands gather under the Ozone Project umbrella and LadBible acquire viral rival Unilad to enhance its social video clout.
As Refinery29 joins Vice Media’s 2,500 global employees, its new owner cannot yet confirm if there will be any layoffs; both brands have already cut 10% of staff in the last 12 months. Vice Media did so in February before tackling a $353m Disney write down and Refinery29 did so last October after a 5% annual revenue shortfall.
Months later Vice dissolved its sub-brands Munchies and Noisey, and most pertinently female-facing Broadly, to rally around the Vice masterbrand once-more. At the time, Vice told The Drum: "We’ve listened to our audience and found that they like to read a broad variety of our content and therefore we’ll be launching a new website that brings all of our reporting under one roof."
Balancing Vice's audience
In 2016, Vice said 64% of its audience was male, fairly well-to-do and 44% likely to be a college grad. SimilarWeb claims Vice.com is now 58.8% male and 58.3% of readers are under 34.
The addition of Refinery29.com (70% female, median age 32), should bring a greater gender balance to Vice's audience demographics.
Vice claims to reach 350m monthly unique visitors and claims Refinery29 will grow that by 17% to near 400m.
Both brands have solid propositions on external platforms too.
On YouTube, Refinery29 (2.27 million subscribers) drove around 10m views in the last 30 days, and Vice (11.7 million subscribers) saw 35.8m views, according to SocialBlade. On Instagram Refinery29 (2.4 million followers) drives hundreds of thousands of views on IGTV and boasts a shoppable channel. Vice meanwhile approaches 3 million followers. Both are present on Snapchat, complete with shoppable ads.
It's harder to get figures for Snapchat but Dominique Delport, Vice's president of international and chief revenue officer, last month told The Drum he was "very excited" by how Vice was performing there. There is a strong opportunity to strengthen the e-commerce output of these channels.
So the move greatly expands Vice's overall audience and Refinery29's potential reach. Tom Harrington, senior research analyst at Enders Analysis, acknowledges this newfound scale but says the brands still face a big challenge to monetise it.
"In the US, a combined Vice and Refinery29 will be arguably addressing twice the number of unique viewers but it will be interesting to see whether this added scale can alleviate the ongoing questions around monetising the reach and traffic that both these organisations undoubtedly have," he says.
Scale alone isn't the answer. The two brands need to cross-pollinate their strengths like "native advertising expertise from Vice and ecommerce from Refinery29," says Harrington. This could bring Vice's creative agency Virtue and Refinery 29's events expertise further into play, though Vice has not yet outlined its plans for Refinery29 or confirmed that it will continue as a standalone brand.
"How Refinery29 is placed within Vice will be instructional," Harrington continues. "Given its current state, Vice is hardly able to play expansively – it recently collapsed a number of its verticals, including Broadly which inhabited a similar space to Refinery29 – but it makes sense for Refinery29 to retain its identity, even though 'efficiencies' will have to be explored."
It is worth noting that Refinery 29 is licensing out its brands. There have been 17 new Refinery Originals products released in the last year, and 28 in the pipeline. The brand itself is a moneymaker.
Of course, looming over the deal is Vice's spotted past. Simon Hunter, associate director of media buying agency MediaCom, believes questions around the "culture fit" are fair "given the issues Vice has faced".
To list just a few examples from recent years: Vice's value has collapsed, its TV experiment is struggling, it dissolved its well-liked sub-brands, there have been sexual harassment accusations and an endless array of wild 'lad' stories. Last March, Vice founder Shane Smith stepped aside from the chief executive role to be succeeded by TV executive Nancy Dubuc, admitting: "[Dubuc] is better than me at everything."
The latest acquisition, says Hunter, "will help show the industry Vice is doing something to address some of its culture issues while actually addressing their commercial issues". A majority of its staff are now female, and so is the boss.
"Being able to bring Refinery29 and its passionate fanbase alongside Vice will show that they are right for other briefs [for Virtue]," adds Hunter. "This combined with a multi-audience offering will equal better long-term success. Add in a company-wide improvement in culture, and it’s win-win."
Carrie Webster, director of paid media at Agenda21, believes the deal will help entice potential clients who once "had reservations regarding the sensitivity of some Vice content".
She says: "Having a softer side to the brand in Refinery29 will allow Vice to attract additional new audiences and open up avenues for luxury or tech brands who may have previously shied away."
Virtue, Vice's now Cannes Lion-winning creative agency can pitch a broader stable of clients. Although it is unclear how many more it needs, it is based in 21 offices globally and claims to have won 45 clients in the last year.
Winning the Grand Prix in Digital Craft… Congratulations to Virtue Copenhagen, for the Address the Future campaign for Carlings! This is the first ever Digital Craft Grand Prix, won by Denmark #CannesLions pic.twitter.com/NnVEFv79iG— Cannes Lions (@Cannes_Lions) June 18, 2019
And there appears to be an emphasis on quality editorial too. Pointing to a pledge from Vice to increase premium content by 20%, Webster says "the production of even more high-quality content should bring them in closer competition with the likes of YouTube, Netflix and Amazon Studio content if rolled out correctly".
Meanwhile, Dubuc has promised to empower young people in a tough digital media environment. Her message is that the Refinery29 deal is a move to enhance the Vice platform in the eyes of its audiences and – she will hope – in the eyes of its advertisers too.
“We will not allow a rapidly consolidating media ecosystem to constrict young people’s choices or their ability to freely express themselves about the things they care about most," Dubuc said as she announced the deal. "At Vice and Refinery29, the megaphone is theirs to use and the platforms are theirs to build with us.”