Vice CEO Shane Smith sees the future of television and it looks a lot like Netflix. Sitting alongside Viceland President and Academy Award winning director Spike Jonze at the Code/Media conference, Smith explained how Netflix’s success proves Vice’s first TV network, Viceland, will work.
Smith explained when Netflix puts out a hit show, its stock rises, allowing the company to leverage for more content, creating a seemingly endless cycle of revenue. Looking at that model, Smith says Vice’s mentality for its first TV network was “Well, we would like to own the pipe, so that if we have hits … then we raise our enterprise value.”
Viceland debuted on February 29 and features shows based on popular website content and original series from Vice such as the music documentary show Noisey, based on the website version of the same name. Viceland was announced last November as taking over A+E Network’s H2 channel.
During the chat at the Code/Media conference, Smith claimed Vice is valued at $4.4 billion because the company made content it can easily license. While Vice has accumulated hundreds of millions of dollars licensing its own content, Smith explained the company is pivoting to its own TV network because the real money is not just in the content, but also in owning the venue that hosts it. “If we had a content-creation engine that spent $250 million a year on creating the content, we’d get $750 million out of that, because you could go to all these countries, sell that content at a huge margin.”
Smith says Viceland will make Vice “the first Internet company to repackage Internet stuff, put it on TV” and give it a bigger audience, but this is just the start. The loquacious CEO has voiced his desire for a TV network for years, and even envisioned Vice as being “the next MTV, ESPN and CNN rolled into one” in a 2013 interview with Financial Times.
“The reality is that MTV was bought by Viacom and CNN went to Time Warner,” Smith states before claiming Vice is set up to build a global platform.
With ESPN losing seven million subscribers in just two years, maybe the best model for the current evolution of TV isn’t on TV … yet.