Facebook Is Taking Over the Media Business, Vice CEO Shane Smith Says
Two Canadian media titans clashed, albeit playfully, on stage Thursday evening as Hearst Digital Media President Troy Young interviewed Vice Media CEO Shane Smith as part of Heart's Master Class interview series at the company's headquarters.
"I'm glad we were able to sling your propaganda," Mr. Young told Mr. Smith after playing a Vice sizzle reel.
At another point, Mr. Young compared Mr. Smith, with his reputation as "a bombastic voice," to Donald Trump.
Throughout the hour-long talk, Mr. Young pressed Mr. Smith to reflect on his life and the company he co-founded as a magazine in Montreal in 1994.
Vice has generally received adulatory coverage from the business press, not to mention investments from a succession of traditional media powers including Walt Disney Co., 21st Century Fox and A&E Networks, in which Hearst holds a 50% stake.
But Mr. Smith said Vice suffered its biggest public relations disaster when Gawker alleged that the company operated as a sort of hipster sweatshop. In 2014, for example, Gawker's Hamilton Nolan wrote that "the company pays shitty wages to low-level employees, 'compensating' them instead with the sheer coolness of working for Vice Media."
Mr. Smith pushed back on that suggestion again on Thursday, saying Vice has been very generous in giving out stock options. The company made 250 new millionaires last year and will make 2,000 more in 2016, he said. Half of Vice employees are partners, he added.
"There was a time when we were a trustafarian commune, and that was fun, that was good," Mr. Smith said. "The thing is, it's a market .... If we're below market, no one's going to work for us." Looking back on the coverage, he said, "What we failed at was to communicate that effectively to the outside world."
Mr. Smith, however, said he's moved on to bigger media fish as the company has grown. Earlier this year it introduced its first TV channel, Viceland, in partnership with A&E Networks.
"What's interesting about my life is that I used to fight with Gawker, and now I fight with CNN," he said.
Mr. Young suggested several times that Vice is still looking for a hit TV show, which irked Mr. Smith, who said "Weediquette," about the culture and economics of marijuana, is "by far" the network's hit show. "Gaycation," hosted by actress Ellen Page, is the second-bigest show, he said. He did not offer any audience numbers, however.
Mr. Smith reprised his familiar role as a tough talker on the media industry and Vice's competitors.
"I don't think it's any secret that you're going to see a bloodbath in the next 12 months," he said, referring to digital media and broadcast TV.
Media companies need a presence on all screens, to be able to program for those screens, to have a so-called over-the-top streaming platform, and "to monetize it in a different way," he added.
"Everyone knows where we have to get to, but no one's doing anything to get there," Mr. Smith said.
Mr. Smith also talked about Facebook's stranglehold on the media industry, a subject keeping media executives up at night as they increasingly seek audiences and revenue there.
"Facebook has bought two-thirds of the media companies out there without spending a dime," he said.