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As Vice Moves More to TV, It Tries to Keep Brash Voice
The live music at the Vice Media party on Friday shook the room. Shane Smith, Vice’s chief executive, was standing near the stage — with a drink in his hand, pants sagging, tattoos showing — watching the rapper-cum-chef Action Bronson make pizzas.
The event was an after-party, a happy-hour bacchanal for the hundreds of guests who had come for Vice’s annual presentation to advertisers and agencies that afternoon, part of the annual frenzy for ad dollars called the Digital Content NewFronts. Mr. Smith had spoken there for all of five minutes before running a slam-bang highlight reel of the company’s shows that had titles like “Weediquette” and “Gaycation.”
In the last year, Vice has secured $500 million in financing and signed deals worth hundreds of millions of dollars with established media companies like HBO that are eager to engage the young viewers Vice attracts. Vice said it was now worth at least $4 billion, with nearly $1 billion in projected revenue for 2015. It is a long way from Vice’s humble start as a free magazine in 1994.
But even as cash flows freely in Vice’s direction, the company is trying to keep its brash, insurgent image. At the party on Friday, it plied guests with beers and cocktails. Its apparently unrehearsed presentation to advertisers was peppered with expletives. At one point, the director Spike Jonze, a longtime Vice collaborator, asked on stage if Mr. Smith had been drinking.
“My assistant tried to cut me off,” Mr. Smith replied. “I’m on buzz control.”
Now, Vice is on the verge of getting its own cable channel, which would give the company a traditional outlet for its slate of non-news programming. If all goes as planned, A&E Networks, the television group owned by Hearst and Disney, will turn over its History Channel spinoff, H2, to Vice.
The deal’s announcement was expected last week, but not all of A&E’s distribution partners — the cable and satellite TV companies that carry the network’s channels — have signed off on the change, according to a person familiar with the negotiations who spoke on the condition of anonymity because the talks were private.
A cable channel would be a further step in a transformation for Vice, from bad-boy digital upstart to mainstream media company.
Keen for the core audience of young men who come to Vice, media giants like 21st Century Fox, Time Warner and Disney all showed interest in the company last year. Vice ultimately secured $500 million in financing from A&E Networks and Technology Crossover Ventures, a Silicon Valley venture capital firm that has invested in Facebook and Netflix.
Those investments valued Vice at more than $2.5 billion. (In 2013, Fox bought a 5 percent stake for $70 million.)
Then in March, HBO announced that it had signed a multiyear deal to broadcast a daily half-hour Vice newscast. Vice already produces a weekly newsmagazine show, called “Vice,” for the network. That show will extend its run through 2018, with an increase to 35 episodes a year, from 14.
Michael Lombardo, HBO’s president for programming, said when the deal was announced that it was “certainly one of our biggest investments with hours on the air.”
Vice, based in Brooklyn, also recently signed a multiyear $100 million deal with Rogers Communications, a Canadian media conglomerate, to produce original content for TV, smartphone and desktop viewers.
Vice’s finances are private, but according to an internal document reviewed by The New York Times and verified by a person familiar with the company’s financials, the company is on track to make about $915 million in revenue this year.
It brought in $545 million in a strong first quarter, which included portions of the new HBO deal and the Rogers deal, according to the document. More of its revenue now comes from these types of content partnerships, compared with the branded content deals that made up much of its revenue a year ago, the company said.
Mr. Smith said the company was worth at least $4 billion. If the valuation gets much higher, he said he would consider taking the company public.
“I don’t care about money; we have plenty of money,” Mr. Smith, who is Vice’s biggest shareholder, said in an interview after the presentation on Friday. “I care about strategic deals.”
In the United States, Vice Media had 35.2 million unique visitors across its sites in March, according to comScore.
The third season of Vice’s weekly HBO show has averaged 1.8 million viewers per episode, including reruns, through April 12, according to Brad Adgate, the director of research at Horizon Media. (Vice said the show attracted three million weekly viewers when repeat broadcasts, online and on-demand viewings were included.)
For years, Mr. Smith has criticized traditional TV, calling it slow and unable to draw younger viewers. But if all the deals Vice has struck are to work out, Mr. Smith may have to play more by the rules of traditional media. James Murdoch, Rupert Murdoch’s son and a member of Vice’s board, was at the company’s presentation on Friday, as were other top media executives.
“They know they need people like me to help them, but they can’t get out of their own way,” Mr. Smith said in the interview Friday. “My only real frustration is we’re used to being incredibly dynamic, and they’re not incredibly dynamic.”
With its own television channel in the United States, Vice would have something it has long coveted even as traditional media companies are looking beyond TV. Last year, Vice’s deal with Time Warner failed in part because the two companies could not agree on how much control Vice would have over a 24-hour television network.
Vice said it intended to fill its new channel with non-news programming. The company plans to have sports shows, fashion shows, food shows and the “Gaycation” travel show with the actress Ellen Page. It is also in talks with Kanye West about a show.
It remains to be seen whether Vice’s audience will watch a traditional cable channel. Still, Vice has effectively presold all of the ad spots to two of the biggest advertising agencies for the first three years, Mr. Smith said.
In the meantime, Mr. Smith is enjoying Vice’s newfound role as a potential savior of traditional media companies.
“I’m a C.E.O. of a content company,” Mr. Smith said before he caught a flight to Las Vegas for the boxing match on Saturday between Floyd Mayweather Jr. and Manny Pacquiao. “If it stops being fun, then why are you doing it?”