Vice CEO: global media headed for ‘chaos’
August 25, 2016
Vice Media chief executive Shane Smith used his MacTaggart lecture last night in Edinburgh to claim the television and wider media world is set for a “bloodbath” of M&A activity and a “dose of chaos” as new business models emerge.
Smith said that the changing digital landscape meant “mainstream media companies” – which he categorised as including Disney, plus Comcast, Fox, Viacom and Time Warner – were facing a global market that would prove too difficult for all to survive. Therefore, they were all chasing scale, he argued.
Smith’s Vice has sold shareholdings to both Fox and The Walt Disney Company, but he claimed he had turned down full takeover bids from both and Viacom, and that the firm’s recent launch of linear channel Viceland around the world was a sensible move.
“The big five will become the big three,” he said of market consolidation. “Apple has made a bid for Time Warner. They also want to buy Netflix, and if Viacom continues its Shakespearean implosion – which is a glory to watch – then everybody is going to be snapping off bits.”
Noting that Facebook and Google were in command of around 70% of the online video market and that changes to their algorithms had already shocked the market this year, he said: “When they sneeze, we catch cold. It means a lot less traffic and a lot less money.
“In the long term, it means a changing playing field, a mild to medium dose of chaos, and a fast moving, ever-shifting, highly volatile marketplace, in which only the nimblest and most dynamic companies will survive.”
“As many as 30% of content companies that exist this year will go away this year, will merge or sell their URLs,” he added, “On top of that, the big scale plays will be bought up by mainstream media companies, and so anyone with half a brain in digital is making strategic alliances.
“What we’re seeing happen is consolidation in mainstream media and a lot of new media is going to go away. There’s just not enough money.”
He said that, similar to the music business when its model was challenged by digital players such as Apple, TV had refused to innovate and was instead “retreating, with a lot of lawyers around us, to hold onto our IP and an increasingly small piece of the pie”.
Smith also addressed naysayers who question the wisdom of the digital-first Vice business launching linear network Viceland in around 50 territories this year, claiming the company was “paid for every show” and every network deal it made.
This was despite Smith acknowledging there was a problem with the traditional ad spot, and that young people were rejecting traditional media in their droves.
Smith challenged the UK production industry to place more focus on genres such as the environment and LGBT rights that he claimed Vice had learned to deliver after beginning life in 1994 in Canada as a magazine about “rare denim, cocaine and super-models”.
He added that currently “we’re not innovating” as an industry and that “we’re doing the exact same thing the music industry did when it was threatened.”
“What we need are people who are excited by the possibilities and say ‘The hell with the limitations, we’ll break the rules.’ I think we’ve got far too many damn rules.”
“Let’s break some rules,” he said. “Open shit up. Media today is like a private club – so closed that most young people feel disenfranchised. You have to hand it over to the kids.”
The MacTaggart lecture is a key fixture in the diary of UK executives each year at the Edinburgh International Television Festival. It has previously been delivered by the likes of writer Armando Iannucci, Google boss Eric Schmidt and Rupert Murdoch.
2
