Can Vice Save the Media from the Business Insider?
Advertently or not, The New Yorker this week presents a sort of Goofus-and-Gallant account of the kinds of media organizations to emerge in the digital age: Henry Blodget's news aggregator Business Insider and hipster clothing store-turned-magazine-turned-advertising empire Vice.
Advertently or not, The New Yorker this week presents a sort of Goofus-and-Gallant account of the kinds of media organizations to emerge in the digital age: Henry Blodget's news aggregator Business Insider and hipster clothing store-turned-magazine-turned-advertising empire Vice. As very different media organizations with very different ambitions and agendas, it's difficult to draw direct comparisons between what Business Insider and Vice set out to do, but it is apparent what kind of future of journalism The New Yorker is rooting for, even if the two pieces show they're not clear on how to pay for it.
In the profile of Blodget, Ken Auletta is so dismissive of Business Insider as a scary manufacturer of parasitic slideshows, one wonders why he followed through on the assignment in the first place. "Lengthy investigative pieces," like the one Auletta wrote on Blodget, "are rare on all-digital platforms. They are expensive to produce, and given a readership that has an average of four minutes to spare, not likely to attract a largue audience." Kevin Ryan, an early investor in Business Insider* gives him a quote that makes journalists cringe: "Scoops are irrelevant. They take two days to report. They're not worth it. If someone has a scoop we post it four minutes later." The business of Business Insider is not described as very impressive either. Ryan tells Auletta that BI lost $3 million in 2012 and journalism is "a bad business so far," adding, "We'll do $11 million in revenues this year. That's tiny. Ad rates are low. It's tough to monetize."
So, what is impressive about BI? Its massive audience. "Traffic was negligible at the beginning, but, according to Google Analytics, Business Insider now draws 24 million unique monthly visitors," Auletta writes, "more than CNBC. Among business-oriented sites, only The Wall Street Journal, Forbes, and Bloomberg have more online users."
Despite being described as "a combination of National Geographic, High Times, and Penthouse Forum," Vice gets a much more favorable treatment from Lizzie Widdicombe, in large part because what it produces resembles the longform, original reporting that magazines like The New Yorker pride themselves on. "In recent years, Vice has been engaged in an energetic process of growing up—both commercially and in terms of journalistic ambition," she writes. After all, it got a huge, expensive scoop, getting some American media into North Korea, didn't it? "Look, the fact that he came is a big deal. The fact that we’re the only people to meet him is a big deal. The fact that we went to his house was a really big deal," argues CEO Shane Smith, referring to Kim Jong Un. The fogies at the big magazine companies may have reservations on how Vice presents its stories (and now its HBO show) but, as Widdicombe writes, "Vice’s biggest novelty is not its unruly journalistic techniques but its ability to make money in the Internet age."
While that might calm the likes of The New Yorker, it shouldn't. As Widdicombe relays, Vice relies on a different kind of business model that blurs the ethical lines between journalism and corporate sponsorship to a degree that would easily become scandal at most established outlets. Vice has no compunction about using its journalism to help make big bucks at its record label, book and film divisions, web sites, and in-house ad agency. In short: "Vice’s profits—which a source estimates were $40 million last year—seem to be dependent on securing and maintaining partnerships with a few major corporate clients," explains Widdicombe. That's a set-up that involves some compromises.** Spencer Baum, the chief strategic officer of Vice and the head of Virtue, its ad agency, told Widdicombe that "sponsorship" is a "dirty word" at Vice, because "being a sponsor is just slapping your logo on something and not being strategic about it." Widdicombe explains the Vice believes "sponsored content should represent something 'fresh'—a true creative collaboration between Vice and its advertiser."
Business Insider, on the other hand, attempts to make money the old fashioned, honorable way: amass a loyal trove of eyeballs and then rent them to advertisers. While Business Insider and The New Yorker use very different tactics to draw advertisers—quantity versus quality—they are in the same business, which, as is no secret, has been going through some difficulties lately.
It's usually the case that journalists know more about journalism than the business of journalism. And so, as is also often the case, the discussion of the new media is usually driven by the end result, not necessarily what goes into paying for it. "For anyone accustomed to the current offerings on cable news—with its 24-hour cycles and blow-dried personalities rehashing wire reports—it’s hard not to be impressed by Vice’s vitality and by some of the topics that it covers firsthand," Widdicombe writes admiringly. It's true: Vice does some very fine work, paid for by money most traditional media organizations would never accept.
*Correction: Blodget is the CEO of Business Insider as well as its editor-in-chief, not Kevin Ryan. ** Clarification: A reference to a stuffed bear and Bill Maher was replaced with a better quote to illustrate Vice's relationship with its corporate clients.