Is Shane Smith the next Rupert Murdoch?

Shane Smith

Shane Smith looks like the type of man who enjoys getting into fights in rough bars.

With his beard and tattoos, the big bear of a 44-year-old Canadian can appear rather intimidating. You wouldn't want to spill his pint.

Looks can be deceptive, however, as through brains rather than brawn Mr Smith has built up a personal fortune of $400m (£240m).

The founder and boss of New York-based Vice Media, he could very well be the next Rupert Murdoch, such is his ambition for global domination.

Mr Murdoch himself seems to think it is possible, as last year the media mogul's News Corporation group spent $70m buying a 5% stake in Vice.

The two men toasted the deal by going for a beer in a Brooklyn bar.

'Immersion journalism'

But for those of us above a certain age, or who aren't very fashionable, what exactly is Vice?

It is a multimedia business that includes an eponymous website and a growing number of sister sites, its own channel on YouTube, and an advertising agency.

It also has a TV show on US cable station HBO, a print magazine, a record label and a book publishing division.

The core of the business is its website, a digital magazine that includes video documentaries and text features, covering everything from fashion to music, travel to technology - and increasingly, news stories.

Start Quote

I didn't think anything would stand in the way. From the beginning it was about reaching global domination”

End Quote Shane Smith

Aimed at teenagers and young adults, Vice specialises in "immersion journalism" - instead of its writers simply reporting on events, they try to all but get involved in them.

A good example of this is the recent video reports from one of Vice's reporters in Crimea. Rather than doing simple pieces to camera, he unofficially embedded himself with pro-Russian militias.

Other Vice features are irreverent or offbeat, some are pretentious, and then there are those of an outright sexual nature.

For Vice it is a winning formula that has created a monthly global audience of 129 million fashionable, young people across its outlets.

And that is a number - and demographic - that means the world's biggest companies are falling over themselves to advertise with it.

Lower East Side hipsters

For Mr Smith and Vice, the story started in the Canadian city of Montreal 20 years ago, where the native of Ottawa co-founded a community magazine after leaving university.

Shane Smith in Libya Mr Smith still reports for Vice from dangerous areas around the world

Together with two friends, he set up a monthly print publication called Voice of Montreal.

Start Quote

Vice will be 10 times the size of someone like CNN... if people roll their eyes, then great, it means I'm the only one going for it”

End Quote Shane Smith

Within two years and under Mr Smith's leadership they had bought out the original publisher and expanded their coverage beyond writing about Montreal's arts scene, changing the name to Vice in the process.

Then in 1999, in search of higher advertising revenues, they relocated to New York.

An online presence soon followed, together with an increasing amount of video clips and documentaries - often made by and starring Mr Smith himself - as the spread of broadband meant more and more people could watch them without interruption.

Mr Smith, who averages about one swear word every third sentence and does not appear to have any self-doubt, says he was "definitely ambitious from the beginning".

He says: "I didn't think anything would stand in the way. From the beginning it was about reaching global domination."

After the move to New York, Mr Smith said Vice had some financial woes, but he knew that ultimately all would be fine from "the response of the hipsters from the Lower East Side".

Index page from Vice's main website Vice's eponymous website remains at the core of its business

He says: "We had all these people coming in, saying, 'I'll do whatever you want for free'. That was when we realised we were onto something."

North Korean ban

Vice now has 1,500 staff around the world, and 5,000 other contributors.

Mr Smith says that for a long time he was "100% hands on", being the editor of all the content so as to maintain the house style and standards.

But in recent years he says he has been able to take a step back because "there are now enough people who have the brand in their DNA".

With Vice this year forecast to make $125m in profits from $500m of revenues, you might imagine that Mr Smith spends all his time looking after the business and financial side of things.

Shane Smith in Pakistan Mr Smith says his own presenting work is an essential part of his leadership of the company

And while this undoubtedly takes up a chunk of his time, he still makes and presents documentaries for Vice, often from dangerous places.

He has reported from Libya during the uprising against Muammar Gaddafi, and from the troubled Darfur region of Sudan.

Mr Smith has also travelled to Mexico to report on drug gangs, and to Pakistan to cover violence in Karachi, its largest city.

And he is banned from North Korea after he made a somewhat mocking travel programme on the country.

Mr Smith says that while Vice board members might prefer him not to put himself in harm's way, such work trips help him run the business to the best of his ability.

Or as he puts it using an automotive analogy: "What I say to them is that if you are going to make great cars, you had better love making cars from the bottom up."

He says that it also shows he "wouldn't send any journalist anywhere I wouldn't go myself".

'No limits'

Yet for all the popularity of Vice's output, the clever stuff is its approach to advertising.

Rupert Murdoch Rupert Murdoch has recognised the potential of Vice, and now owns 5% of the business

Helped no doubt by expertise from advertising giant WPP, which is a minority investor, Vice has been at the forefront of developing and maximising new ways of online advertising.

To name but two deals, microchip company Intel sponsors one of its sub-websites, and BMW provided some of its Mini cars and funding for a Vice travel programme.

Mr Smiths says: "Vice will be 10 times the size of someone like CNN.

"Even if I don't do it, the chance is there. If people roll their eyes, then great. It means I'm the only one going for it.

"Why can Vice be bigger? Because of the internet. The internet is global, and we aren't limited by anything."

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    RETAIL SALES 09:36: Breaking News
    shoppers carrying shopping bags on Oxford Street

    UK retail sales volumes in the second quarter were the strongest in 10 years, official figures have shown this morning. The month-on-month figure is up just 0.1% in June, but for the three months to the end of June sales were 1.6% higher. That's the strongest quarterly rise since early 2004, according to the Office for National Statistics.

     
  2.  
    CATTLE CLASS 09:20:
    Commuters travel on a crowded Northern Line tube train

    One for those who live and work in the nation's capital, this one, but if you've been getting the London underground in the last few weeks and struggling to cope with the heat - maybe even nodding off on the central line on the way home - then this is why. According to the London Evening Standard temperatures on the Tube have hit "brutal" highs that would be illegal for the transport of livestock!

     
  3.  
    EASYJET TRADING 09:05:
    An EasyJet plane

    EasyJet says it expects its annual profits to be 14% higher this year, assuming there is no further disruption to flights over the next two months - that's in line with analyst expectations. The low-cost airline forecasts pre-tax profits for the year to September of between £545m and £570m. EasyJet said its third quarter trading performance was "solid" with sales up 8.6% percent to £1.2bn and capacity up 6.8%.

     
  4.  
    BRITVIC TRADING 08:56:
    Robinsons Orange Squash

    British soft drinks maker Britvic has said today it expects full-year operating profit to be near the top of its guidance. Fourth quarter trading has started well and it has achieved cost savings targets, it says. It expects operating profit to be between £148m and £156m. The upbeat assessment comes a year after Britvic rebuffed a merger proposal from rival AG Barr.

     
  5.  
    STANDARD RUMOURS 08:47:

    The rumours over Peter Sands and Sir John Peace shouldn't come as a major surprise given that last month Standard Chartered issued its second profit warning in two years. It wasn't a small warning either. The bank said first-half operating profits would be 20% lower than a year earlier, blaming a slump in income from its financial markets business. That came only three months after the Asia-focused lender reported its first fall in annual profits for a decade.

     
  6.  
    MARKET UPDATE 08:42:

    European markets have opened lower this morning as investors try to digest a raft of company announcements and economic data. In London, the biggest rise on the FTSE 100 so far is mining firm Antofagasta which is up 1.3% to 845p. On the fallers side Kingfisher leads on worse than expected second quarter trading, down nearly 7% to 312.7p.

    • The FTSE 100 is 0.37% lower at 6773.08
    • The German Dax is down 0.62% to 9693.22
    • France's Cac-40 is 0.51% lower to 4354.07
     
  7.  
    STANDARD RUMOURS 08:38:
    CEO of Standard Chartered, Peter Sands

    A rather terse statement from Standard Chartered this morning, a UK bank that does most of its business in Asia. Some rumours suggest they may be looking to replace chief executive Peter Sands and chairman Sir John Peace. The board is "united in its support of both Peter Sands and Sir John Peace," it says. "No succession planning is taking place as a result of recent investor pressure."

     
  8.  
    WINTER STORM COMPENSATION 08:28: BBC Radio 4

    "Part of what we are announcing today is that the companies are paying out money to charities that work on the ground helping with these situations [the winter storms]," Maxine Frerk, senior partner at Ofgem, tells the Today prgramme. She adds both SSE and UKPN have "learned lessons", particularly around communication both through call centres as well as on the internet and social media.

     
  9.  
    WINTER STORM COMPENSATION 08:19:

    Crucially, Ofgem says the extra £3.3m SSE and UKPN are paying out is going to organisations like the British Red Cross rather than back to customers who were left without power over Christmas. What is interesting is Ofgem has decided to up the minimum compensation for customers who are left without power for 24 hours from £27 to £70. The regulator is also upping the cap on compensation payments from £216 to £700.

     
  10.  
    MARKET UPDATE 08:07:

    Tokyo stocks lost early gains to finish down 0.29%. The benchmark Nikkei 225 index lost 44.14 points to close at 15,284.42. Geopolitical worries about Gaza curbed risk appetites. Hong Kong shares ended the morning session 0.39% higher after preliminary figures showed an index of Chinese manufacturing activity hit an 18-month high in June.

     
  11.  
    WINTER STORM COMPENSATION Via Twitter Adam Parsons Business Correspondent

    tweets: OFGEM says SSE and UKP "could have done more to get customers reconnected faster" during winter storms

     
  12.  
    WAGES 07:53: Radio 5 live

    "Wages are still flat," says Paul Mawdsley, a recruiter who runs Mawdsley Consultancy, talking to 5 live. "There isn't a great demand in the labour market yet," so that's keeping salaries down. He's also seeing a "dire shortage" of engineers in such areas as pneumatics and hydraulics. Not enough people are being trained.

     
  13.  
    INTEREST RATES 07:50:
    Bank of England Governor Mark Carney

    Meanwhile, the Guardian thinks the Bank governor is worried about low interest rates leading households to take on too much debt. As you might imagine that puts them on either side of the when-are-interest-rates-going-to-rise guessing game that is fast becoming a national obsession.

     
  14.  
    ENERGY PROBE 07:40:

    The CMA's probe will see whether energy companies should be wholesalers as well as selling to retail customers (you). The gas market appears to be working better than the electricity market, and they'll try to find out why. They won't be looking at big business customers because that market looks fine, the CMA says.

     
  15.  
    INTEREST RATES 07:31:

    Bank of England governor Mark Carney is in all the newspapers today following his speech to the Commonwealth business conference yesterday. The FT interprets Mr Carney's speech as revealing deep concerns about household indebtedness and the effect an interest rate rise will have on households' ability to service their debts.

     
  16.  
    UNILEVER RESULTS 07:23:

    Unilever, the food giant, has said first half net profit rose to 3bn euros (£2.37bn) from 2.68bn euros even as sales fell. Its cost savings plan is working well, it said. Excluding businesses sold or otherwise disposed of, sales rose 3.7%.

     
  17.  
  18.  
    WINTER STORM COMPENSATION 07:19:
    SSE logo at the SSE Training Centre in Perth

    SSE and UK Power Networks (IKPN) are to pay an additional £3.3m for delays in getting power back up and running to households in southern England following last winter's storms. That's on top of the £4.7m the two energy companies are paying out to customers under guaranteed standards and in goodwill payments. It brings the total paid out by the two companies to £8m.

     
  19.  
    ENERGY PROBE 07:04: Breaking News

    The Competition and Markets Authority (CMA) will carry out an independent investigation to see if there are any features of the energy market which "prevent, restrict or distort competition and, if so, what action might be taken to remedy them," it says. It will report back by Christmas day 2015.

     
  20.  
    INTEREST RATES 06:56: Radio 5 live

    Kathleen Brooks of FOREX.com thinks January will be the time for a rate increase from the Bank of England. Maybe a 25 basis point increase to 0.75%, she says. Bank governor, Mark Carney, said yesterday there may be more labour supply than previously thought. Wages growth is thus being held back.

     
  21.  
    RUSSIAN SANCTIONS 06:44: BBC Radio 4
    Russian President Vladimir Putin

    Kathleen Brooks has now popped up on the Today programme. She says sanctions against Russia "are toothless at this point....Russia has a lot of energy that the West wants." She adds divisions in the West over energy policy have been exposed by the fact "the UK and France have a spat about sanctions and that just plays into Vladimir Putin's hands." Ms Brooks says there have "also been rumours that Russia has been unofficially propping up the rouble. The sanctions are not going to hurt the European Union's energy links to Russia."

     
  22.  
    ENERGY PRICES 06:31: Radio 5 live

    If you have to steel yourself with a nice cup of sweet tea before opening your latest energy bill, spare a thought for Nigel and Linda Brotherton, who were told by Npower that their monthly direct debit was going to increase from £87 to £53,480,062. Npower has apologised and the incorrect bill has been cancelled. "It's a massive shock," he tells 5 live.

     
  23.  
    GLAXOSMITHKLINE 06:24: Radio 5 live
    gsk

    David Buik of Panmure Gordon is helping us digest the GlaxoSmithKline results on 5 live. "Sales to China is only about 3% of its total business," and so the bribery scandal there is an unwelcome distraction.

     
  24.  
    ROUBLE 06:15: Radio 5 live

    Kathleen Brooks of FOREX.com is on 5 live talking about Russia. The Russia rouble has been "resilient" bearing in mind the new sanctions against Russia. "They are able to shrug off geopolitical risk quite quickly," she says. President Putin may be "breathing a sigh of relief," she adds.

     
  25.  
    POUND 06:01: Radio 5 live

    The pound buys about 1.27 euros, its strongest in nearly two years - don't get excited that's not what you'll get from your local foreign exchange. Still, Kathleen Brooks, a research director at FOREX.com, is on 5 live talking about it. The strong pound has helped ease inflation, she says. "Over the period of the financial crisis we had sky high inflation," she adds. The recovery is consumer-driven, which is aided by a stronger pound, which means cheaper imports.

     
  26.  
    06:00: Howard Mustoe Business reporter

    Good morning! Get in touch via email at bizlivepage@bbc.co.uk or on twitter @BBCBusiness

     
  27.  
    06:00: Matthew West Business Reporter

    Good morning folks. So what's new? Facebook has posted some stonking profits for its second quarter, the US has - just - lifted its ban on flights into Tel Aviv and it's Thursday, so General Motors has decided to recall another couple of hundred thousand cars overnight. There's plenty more to come, stay with us.

     

Features

  • Shinji Mikamo's father's watchTime peace

    The story of the watch that survived Hiroshima


  • Hamas rally in the West Bank village of Yatta, 2006Hamas hopes

    Why the Palestinian group won't back down yet


  • Mary WayaQueen of the court

    Woman who beat "fat" jibes to turn Malawi into netball champions


From BBC Capital

Programmes

  • A man holds a sign which reads Bring Back Our GirlsHARDtalk Watch

    Why there is still hope and optimism for the rescue of Nigeria’s kidnapped schoolgirls

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.