How might Vice put it? We got the lowdown on a classic story about the downfall of a one-time digital media darling!
Vice Media filed for bankruptcy protection on Monday. The news was not entirely unexpected, but in the wake of BuzzFeed shuttering its news department and layoffs at Insider, Vice’s bankruptcy casts an even greater pallor over the online news industry.
Vice Is Its Own Reward
Vice Media started out in 1994 as a punk Canadian culture magazine called “Voice of Montreal.” It changed its name to Vice in 1996, and, by the mid-2000s, it had moved to New York City and was making online videos. In 2017 the company was valued at $5.7 billion, which at the time was a lot more than The New York Times.
But Vice suffered from the same flaws as many digital media startups according to Felix Simon, a digital journalism researcher at the Oxford Internet Institute. “They always had the problem that they had no sustainable long-term business model,” he told The Daily Upside. “They tried to grow very quickly with lots of money from investors.” Digital publishers’ existence hinges on growing audience numbers via other online platforms, and tech is a harsh mistress. Publishers are now uncomfortably aware that a turn of Caesar Zuckerberg’s thumb could be what determines their fate.
“They [digital media startups] were chasing revenue through ads but with the advertising market still basically captured by the likes of Meta and Google, there was never a truly independent source of revenue for them,” Simon said.
Vice’s filing suggests it’s got a sale agreement ready as a baseline, although it might welcome another party swooping in with a higher offer:
- The filing said Vice is pursuing a “stalking horse” agreement, which means it’s found a buyer ahead of filing for bankruptcy. The New York Times reported a consortium of Vice’s creditors led by Fortress Investment Group and Soros Fund Management, have bid $225 million for the company.
- Sources told CNBC the company had wanted a valuation of $1 billion to $1.5 billion. Ouch.
Always Look on the Bright Side: Vice will continue to publish news as the sale is hammered out, and its co-CEOs managed to strike a cheery tone in a statement to the NYT. “We look forward to completing the sale process in the next two to three months and charting a healthy and successful next chapter at Vice,” they said. Vice did not offer any immediate comment when contacted by itself for comment.