Why a cable channel?
That is: Why is Vice Media, the brand that prides itself on reaching millennials who don’t consume traditional media, launching Viceland, a new cable channel today?
Vice CEO Shane Smith and Creative Director Spike Jonze have heard this question before, so when they appeared at the Code/Media conference, they had answers prepared for Kara Swisher and Peter Kafka. Chief among them, per Smith: They aren’t “fucking stupid.”
Smith and Jonze were a study in contrasts: Chief shit-stirrer Smith played the part of the passionately verbal slacker; Academy Award-winning film director and alternative-culture all-star Jonze was modest and soft-spoken (and fighting the flu). In addition to coining such soon-to-be catchphrases as “entertainmentize” and “brand artist,” Smith said that now is the best time in history to be a content creator.
You can watch the entire video below:
And here’s an audio-only version:
Kara Swisher: Before we begin, Spike is being really lovely. He’s got a flu, a little bit, right?
Spike Jonze: Yep.
Swisher: But he’s got his orange juice, and we’ve got tissues for him, and we’re forcing him onstage.
Shane Smith: I’m a germaphobe.
Peter Kafka: What’s in your glass, Shane?
Smith: Things that kill germs.
Swisher: So, we’re going to get to porn later. I know that’s a favorite topic of yours.
Smith: We heard Joanna [Coles] killed it already. Kind of exhausted that topic.
Swisher: Exactly. But let’s talk about what you’re doing. There have been, like, 90 articles about your efforts — mostly, “We’re gonna fuck shit up,” “We’re going to fuck the shit out of things,” fucking shit, shit, fuck, stuff like that. So what are you doing?
Smith: Fucking shit up.
Swisher: Why are you making a cable channel now? What is the concept? You keep saying you’re not really doing that, but it seems like that’s what you’re really doing.
Kafka: John Skipper came out and talked to me for quite a while about the fact that the cable business is shrinking.
Kafka: So there’s no debate about that. The guy who has a cable business says cable business is shrinking. On top of that, by all accounts, the people that you guys have found out how to reach — the young ’uns, the millennials — they don’t watch pay TV. You’re making a pay TV channel. That’s what we’re trying to figure out here.
Smith: We’re dumb. Next question.
Kafka: Spike, do you want to take —
Jonze: Don’t people still watch the shows on some format or another, though?
Kafka: Some of them do. I think a lot of what’s happened is that a lot of the stuff that was on cable that didn’t have a point, there was no point to it, it was just on –that’s going away, right?
The best time to be a content creator
Smith: Look, what you’re talking about — and you were a very nice interviewer to Mr. Skipper — correct me if I’m wrong, but isn’t [ESPN] the most profitable network in the history of television?
Smith: Okay, so let’s start there. For us to go to a network is a very logical decision. Whenever you say [you’re] going to be something like platform-agnostic, we’re gonna say, “We’re going to be online, mobile, TV — if it’s holograms, whatever the fuck it is, I don’t care, but I’m going to be on all of them.”
Everyone nods, “Mm-hmm, yes, we’re platform-agnostic.” When we were talking earlier, no one’s platform-agnostic. If you’re TV, you’re TV; if you’re online, you’re online, and no one likes you to move. Why? I don’t fucking know. But we’re going to be platform-agnostic. If we want to be on TV, we’re going to be on TV. If you want us on mobile, we’re going to be mobile. If you want us online, we’re online.
Now, it’s also the best time in history to be a content creator. Why? Because it’s a market. So I can go to television — now there’s Netflix, there’s Yahoo, there’s Amazon, there’s Apple, there’s Verizon. So I can go country by country and say, “Who’s going to give me the most money, the most support, the most eyeballs?” Is it going to be mobile? Is it going to be online? Is it going to be TV? I can do all three. I can do three simultaneously like I’m doing in Canada — like we do in communist Canada. Or we can sell to the highest bidder.
Now, the other thing that we realized, everyone always asks, “What is Vice?” Let’s get down to the nitty gritty. I’m going to Thomas Jefferson you, or 8 Mile them.
Smith: And I’m going to answer your arguments before you do it.
Swisher: We’re going to fuck shit up.
Smith: Why is Vice worth so much fucking money?
Kafka: Four billion dollars. I got a word in. More than four billion, at least. Disney says four billion.
Smith: Do they say four billion?
Kafka: In their 10-Q. We just looked at it.
Smith: It’s more than four billion.
Swisher: Okay, 4.4 billion.
Smith: So that’s four hundred million dollars.
Kafka: I’m not good at math.
Smith: You just rounded it down.
Swisher: Yes, we rounded it down.
Smith: Why? Because you guys are mean. That’s why.
Smith: If you were nice, you’d say five. You’d round it up.
Smith: Now, that’s what I would say. ’Cause I’m Shane. So we looked at why we’re valuable, and we’re valuable because we made content that we can license. Why is that important? Because like I just said, it’s the best time to be a content creator, and licensing is generally 100 percent margin. So you look at that and you say, “Okay, this is just a fantastic business.” It was like the cornering-the-frozen-orange-juice scene at the end of “Trading Places.”
Smith: And we’re just selling, selling, selling, selling, selling TV, and we said, “Well, if we actually owned these pipes, we’d make a lot more money.” And so we looked at it and said, “Okay, 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.
Kafka: This is a change for you, right? Because up until now, your business has been Intel or someone who says, “Make us some content, find us some eyeballs …”
Smith: Part of our business.
Kafka: ” … and you make them some content and find some eyeballs.
Smith: But part of our business that people don’t know about is repackaging those shows. For example, Intel — you were talking about — a TV show in China with 200 million eyeballs a week watching it. And so we said, “Okay, well, we can be the first Internet company to repackage Internet stuff, put it on TV, and that already has a margin, so we can actually put that on TV, give it a wider audience and make more money.” So why wouldn’t we do that? What’s funny is this is bringing us more advertising, it’s bringing us money, more licensing, more deals with platform companies as well as mobile companies. And everybody just reductio ad absurdum says, “Shane wants a TV channel.”
“Shane wants a TV channel”
Kafka: But you do — you got yourself a TV channel. Spike, you’ve worked with Shane for a long time. When he said, “Let’s make a TV channel,” what was your reaction?
Jonze: It’s been a few years ago we started talking about it seriously — like three years ago. And I liked the idea, because I like making sure our company could be a creation company, and not about having to sell ideas off one at a time —
Swisher: To an Amazon or a Netflix — whoever.
Jonze: Yeah, to different people.
Kafka: To advertise —
Jonze: To advertisers or to channels or whoever, and I think the idea of making sure our company is about storytelling. It’s a really creative environment, and the idea of having this production budget basically just to —
Swisher: To make original shows. That you put on your channel.
Jonze: That we put on our channel, and then what Shane was talking about —
Swisher: And then he regurgitates it into China.
Jonze: Yeah, he gets it into China.
Swisher: Right, okay. I’ve got your plan.
Jonze: That is why I was excited about it — we could focus on making things, as opposed to selling things.
Swisher: So, how is that going to be different from what’s on TV? TV has been doing very interesting stuff lately. There’s a lot of great shows on. A lot of people feel it’s super creative now. One of the things you’re talking about is doing something differently. Are you really doing something differently, or just creating what you feel like? One of your shows is — we’re going to show a video of it, right?
Kafka: Yeah, you’re leading right up to it. But let him answer it first.
Swisher: What are you gonna do differently?
Jonze: I’m not sure if we’re going to do anything radically differently. I don’t know how we’re doing anything differently, if you want to compare us to somebody else. I just know what we’re doing in the office every day, and what we’re trying to make, and what we’re trying to do is make things that we are interested in, or that people that we are inspired by or interested in are making — we can support them to make things they’re interested in.
Kafka: Is there a model you’ve got, like, “Oh, I really like what they did on that network or online over here.”
Jonze: No, right now it’s mostly unscripted. So that’s the one limitation. But we do have a scripted comedy show by these filmmakers in Canada. I just saw the first cut, and it’s amazing and these guys — I would give them the whole channel if I could. These guys are just like anarchist filmmakers, and —
Smith: Or a second channel.
Jonze: Or a second one.
Kafka: Second channel. Your valuation goes up.
Kafka: We’ve got a clip here from a [Viceland] show with [actress] Ellen Page. You guys want to set it up?
Jonze: Yeah, this show is “Gaycation,” and this is a show that Ellen is making with her friend, Ian Daniel, and they travel around the world and explore LGBT culture.
Kafka: Did they bring it to you, you bring it to them? How did you get her involved?
Jonze: I asked Ellen if she had anything she wanted to do, and —
Swisher: And she said “gaycation.”
Smith: And in answer to your question, we live in our bubble in Williamsburg, and we make stuff, so, no, we’re not trying to say, “Oh, let’s do ‘The Voice.’ But what we’re doing on TV, I believe, programatically has never been done before. And this is a perfect example, because when you say “Gaycation,” it’s like, okay, is it a travel show, is it a news show, is it an LGBT show? What is it? And nobody could come up with a definition, because there’s never been a show like it. Can we see the clip?
[In the clip shown at Code/Media, Page confronts a virulently anti-gay Brazilian police officer who admits to killing gay people. Here’s the trailer for the series:]
Update: Here’s the clip shown onstage at Re/code:
Swisher: Oh, goodness. That was not a good gaycation. I was thinking St. Barts or the White Party. But, wow, I really don’t want to watch that. Tell me what you were thinking about with this, serious.
Jonze: We’re trying to create an environment [where] creative people can come make what they care about, and this is obviously what Ellen cares about. She cares about so much, she is willing to go around the world, and go into a favela in Brazil and confront this guy. And I think that represents in a really good way what we’re trying to do, which is, can we make something that’s in this sort of corporate media world that feels personal? And if we can, then I would think of that as being successful.
Kafka: It’s super dramatic. Kara’s first reaction after the joke was, “I don’t think I want to watch that.” Vice generally has a reputation for having — “edgy” is a dumb word, but we’ll use that word for shorthand — really edgy stuff, niche stuff. Shane, you said, “We’re not doing ‘The Voice.'” “The Voice” is a big, popular TV show. Why wouldn’t you? Isn’t there pressure to create shows that lots of people want to watch?
Smith: When Kara said she wouldn’t watch that, I think she’s being facetious. But who would watch that in the audience — let’s see a show of hands. Who would watch that? So, half the people.
Swisher: I’m not sure I’m your target group.
Smith: Yeah, you’re not our target group.
Swisher: My son is your target group.
Jonze: But why wouldn’t you want to watch that?
Swisher: Because I lived it. But that’s different, not that particular thing, but I don’t know. But [Kafka] was asking a question about ratings. The idea is that you aren’t going to do ratings for six months, is that right?
Smith: Well, to answer your question, what’s happening in this country politically, what’s happening globally, what people are finally waking up to and it’s in the news everywhere now is that Gen Y is now the No. 2 demo — some say No. 1 — as baby boomers who’ve had the stranglehold on the cohort for the last, well, since the ’60s, on media, on politics, on everything, consumerism. All of a sudden, Gen Y has gone from niche to mainstream media, right? And so we went from being niche to mainstream media, and we’re growing as Gen Y grows. And so, when we program things, we say, “Okay, we’re going to program things that they’re interested in.” For example — how this started, I was telling you — we do a lot of research on the No. 1 cohort that goes out and spends money on food. Not moms who spend money at Whole Foods, but going out to spend money is Gen Y. Name one Gen Y-specific food show.
Kafka: Facebook video.
Swisher: “Fuck, That’s Delicious.”
Smith: “Fuck, That’s Delicious,” well, that’s ours.
Swisher: My son watches it.
Smith: So, for us, we said, “Okay, let’s make ‘Fuck, That’s Delicious’ with Action Bronson,” etc., etc. So we’re making programming, and again with the LGBT, like “Gaycation” or environmental programming that’s interesting, etc., etc. We believe that there’s no one doing that.
Better, faster, meaner
Kafka: Do you believe that Gen Y, millennial audiences are fundamentally different in what they want to watch?
Kafka: The kind of taste they have?
Smith: Yes, and I’ll tell you why. When we first said we were gonna do news — and this is my whole thing with doing press or talking to people about this — everyone loves disruption, disruption, disruption, disruption, until you actually disrupt anything, and then everyone says you’re an idiot because it’s the status quo, they don’t want it to be disrupted. When we went and we looked at news — and again, we do a lot of research — the No. 2 passion point for young people is news, mainstream media news, after music. Music is the No. 1 globally. And when we started news, everyone said young people don’t care about news, and they especially don’t care about international news. So that’s a huge, wide space, and we said, “Well, we don’t see that, and our research says the exact opposite.” So Vice started a news channel, and it rebranded our whole company overnight. It brought us a whole new audience overnight. It brought us whole new relationships with HBO, whole new revenue packages, news around the world in all of our different countries. It completely changed the company.
Swisher: One of the things that you do get criticism for is that you sort of jump from lily pad to lily pad. Like, sort of, “we did Vice,” it was somewhat big, but you needed to grow beyond it, clearly. And then you said, “mobile,” or “I’m gonna slice and dice myself,” and now television. What is the end point for you? For some in the media who criticize it, it’s the jumping from one thing to the next —
Jonze: But we’re not leaving those behind. Vice News is still a potent part of the company, and there’s other means of distribution, other means of creation.
Swisher: Why confuse —
Smith: Well, I can answer that question. You’re exactly right, Spike, in that we build things, and then we build more things. It’s growing exponentially. We’re just doing more. So we’re not going from lily pad to lily pad — we’re building. The reason why they will say that is because the overall business strategy is not radical. Anytime you have a destratification of a power structure, that’s a beautiful time to get in there and take what’s weak. So we say, “Okay, how do we become No. 4?” You don’t become No. 4 without having TV. Hell, we should have radio, we should have everything. Why? Because we have better, faster, meaner content than those guys. We can monetize better. We can move faster, we have a younger demographic and a younger workforce, so I’ll put myself up against them any day of the week.
Swisher: Except they’re your investors, all of them, correct? News Corp would have been a competitor.
Smith: But why? But why?
Swisher: I want to know, why do you?
Smith: Why? Because if it works, if the equation works. If we program three screens and one screen over the top, if we bring native advertising to TV, we’ve won. And so they want to have their feet in the pool, because it’s Disney, it was Time Warner, it was Fox — it’s all of them. Because if we succeed even a little bit, you can take those learnings, and that’s going to be the future of media, because we’re out there experimenting with all this stuff.
Kafka: So, you’re telling Disney you’re gonna invest —
Smith: So the “lily pad to lily pad to lily pad” is actually us out there saying, “We’re a laboratory. We’re experimenting. We’re not afraid. We’re going to try everything there is to try. Figure out what that mix is.” Those learnings are invaluable to everybody else, because they don’t have to make those mistakes with a lot more zeros attached. Sorry.
Kafka: You’re gonna say, “Watch us screw up or figure it out and invest at the same time, and you win both ways.”
“Crest doesn’t want to be next to severed heads.”
Kafka [to Smith]: You mentioned HBO — you’re on the HBO show. You’re not going to be in any of the Viceland shows, right?
Smith: My passion is news. News is an interesting thing. What we learned was, it’s very difficult to monetize news, because Crest doesn’t want to be next to severed heads. HBO offers us a unique opportunity to fund a multi-year daily, weekly, a feature-film series, almost unlimited at the highest standard of funding, so we don’t have to actually sell advertising against it. We’re completely free to go do whatever story against whatever company we want to — or any politician — and we can then take that and put that into our various news shows around the world unbeholden to any advertising.
Kafka: They funded your show, now you went and have a rival network. So, is you not going on the Viceland stuff [part of] a deal? Is that a negotiation point?
Smith: No. I’m an old man, rotund, verbose. I’m good at very few things, and I don’t want to be the face of our network. Our network — what we’re famous for is giving over the company to people. Like, for example, a lot of people who are doing TV, all the people who are doing our monetization have never done anything in TV and/or TV monetization before, and that’s our strength.
Swisher: But you don’t know anything?
Smith: Exactly, ignorance is —
Swisher: You do have some executives they brought in that do know —
Smith: Yeah, on the business side, for sure, because as we grow, we’re doing a lot of international TV deals, a lot of mobile deals. We don’t want to get hoodwinked, so we have people coming over from Discovery and other companies. But I’m talking about on the creation side.
Swisher: So you have people that don’t know anything about —
Swisher: And your point being, “We’re so stupid we can’t fuck up.”
“We’re so stupid we can’t fuck up.”
Smith: Correct. I don’t know what that means, but I’m just —
Kafka: So, media is consolidating. You guys are worth $4.4 billion, I want to get the number right. It seems like you should be out there buying. Are there brands, are there assets you want to pick up?
Smith: That’s a great question. Yes. But not at 4.4, probably at 10.
Kafka: So, what’s out there?
Smith: I think that again, you’re gonna see, I think the smart companies — Vox being one of them, BuzzFeed being another, us. I think we saw what was coming this year in new media, whoever is funded and growing and has a narrative is going to be picking up the smaller guys because what it’s all about really is monetization. They’re figuring out that Twitter is a great fucking platform. It’s amazing, it’s huge, it’s never going to make money. They can’t figure out how to make money, and we’re realizing that. So somebody — Apple, someone — is going to have to buy them, and that may be Instagram. Like Instagram for Facebook —
Kafka: I’m sure there’s somebody from Twitter here that wants to say, “We made $2 billion last year.” But you mean long-term it’s not going to work out.
Smith: Yeah, and by the way, we’re talking profits. So when I talk about monetization, he or she who monetizes best wins. The scale game has ceased to be the prize. It’s now how much revenue can you bring in. And for us that’s important, because as Netflix proved, if you expand, you can have content drive your enterprise value. I mean, Time Warner, Fox, don’t really have that thing [where] if they have a hit, it drives their share price up. Whereas if Netflix has a hit, it drives the share price up, and then they can leverage that to buy more content, etc., etc. And so we looked at that and said, “Well, we would like to own the pipe,” so that if we have hits, because we believe we’re gonna drive, then we raise our enterprise value.
Swisher: I have a question, Spike. When you’re thinking about how this is changing, the media landscape is changing … You’re famous for movies, being a director, a very traditional, a traditional Hollywood career —
Smith: Um —
Swisher: Not you, him.
Smith: But TV, too.
Swisher: TV, too. How do you look at Hollywood now? How long have you been working with Vice? You’re the creative director of Viceland, is that right?
Jonze: Yeah, I’m the president of Viceland; the co-president of Viceland is Eddy Moretti, wherever he is. [Looks into the crowd.] There’s Eddy.
Swisher: How do you look at Hollywood now, after having been in that world making movies? What was the last one? “Her”?
Jonze: “Her” was the last movie. I’ve been with the company now for, like, 10 years. How do I look at Hollywood? I guess I didn’t really come from Hollywood to begin with, so I get to make movies there when I have an idea for a movie, but I make things.
Swisher: How do you look at the landscape there now? Is it very different, or do you feel that this is how it’s going to be — companies like this and others?
Jonze: I don’t think I look at the landscape. I have an idea of something I believe in, and then with my partners I figure out how to get it funded.
Kafka: And Shane says, “Well, the millennials and Gen Y, they consume things differently, they have different taste, they react differently.” Do you think, “All right, well, I should make a movie differently. I should make a different kind of theme. Or maybe I shouldn’t make movies at all, because they’re never going to sit and watch a 90-minute film”?
Jonze: No, no. For better or worse, I guess, I don’t think that way. I think about what it is that’s inside of my head or inside my imagination — things I’m thinking about — and that’s what I make.
Kafka: You’re platform-agnostic — Shane’s terms.
Smith: The reason why this works it that Spike is a lightning rod for talent that we can put into a bubble and say, “Don’t worry about money, don’t worry about this, just make great stuff. And if you make great stuff, we’re going to then, on my end, put it into as many platforms, as many eyeballs, and make as much money as we can so that we can keep paying you to keep making your stuff.”
Swisher: Is there any part of this group that you think is more important? Your online or your mobile that you’re moving away from?
Did somebody say “brand artist”?
Smith: Scale is going to come from mobile. Everybody knows that, we know that. We’re not stupid. Mobile is a big thing. We’re making a lot of mobile deals. Money will come from TV because, again, it’s not a secret that mobile, much like online was back in the day, is a lot of scale, not a lot of cash. Seventy-five percent of the world’s advertising budget is still in TV, especially when you look at it globally. The reason why we’re platform-agnostic, if you can rob from Peter to pay Paul, do television that works, have some hits and everybody goes, “That’s great, you can take those stars, take that program, you take whatever and put that into mobile,” you’ve won both the monetization game and the scale game. So we’re platform-agnostic because you can get the scale and the money at the same time.
Kafka: You want to get bigger. At some point, if you keep growing, the traditional media companies can’t buy you, you have to go public, you said that’s interesting to you. I have a hard time imaging you as CEO of a public company. You just came back from Iran —
Smith: I don’t have to be the CEO.
Kafka: How’s that gonna work? You don’t have to be CEO.
Smith: I’m the largest shareholder. I do what’s right for the company. I don’t have to be CEO. I could be executive chairman, I could be a Bill Gates, head of content. I could be [Wolfgang] Amadeus Mozart with my white wig and my butt plug. I don’t care. I just want to do what’s right for the company, and as the company evolves, my role evolves. I went from a day-to-day guy to a brand-artist guy and —
Swisher: Wait, did you say “brand artist”?
Kafka: Ask the followup.
Swisher: What the fuck is that?
Smith: If I’m CEO of Vice, where everything laddered up to me, and I enjoyed that. I don’t know why. But if you’re looking at HR issues, or infrastructure issues, we’re growing very rapidly, so we already have to look at our new campus, even though our old campus was just finished. And all this stuff that we used to get involved in, that’s stupid. What should I be doing? I should be figuring out where the brand is going, why we’re doing TV, what countries we’re going into, how the content is made, quality control on that content, partnerships with people like Spike, how to make those partnerships actually work so he gets protected, and the narrative — because no matter what’s true, people like you and people out there will write a narrative about it. So all your lily pads things, and “Shane wants TV,” and I’ve hoodwinked everybody in the media business —
Swisher: I didn’t say you hoodwinked them.
Smith: Other people have.
Swisher: I could, if you’d like.
Smith: It’s all a narrative. It’s all a construct. I was talking to the Unilever people: How do you run a company in 200 countries with 300,000 employees? And there’s only one way, and that’s through mission, so they said, “Okay, we’re going to go to 100 percent sustainable food” — which for them is difficult, and that’s a lot of money and a lot of work. But otherwise, you’re not going to have people wanting to work for you and be there at midnight on a Sunday. And so I realized that Vice, unless it keeps on reinventing itself and has a mission, that we’re going to just get big, big, big, big, big, and then we’ll just be like everybody else, so —
Kafka: What’s the mission?
What’s the mission?
Smith: That’s a brand artist versus a guy who sits there and says, “Well, how much did we spend on that Coca-Cola bottle?” And I’m actually not good with that stuff, anyway.
Kafka: What’s the mission?
Smith: The mission is to be become the largest media company in the world and to not suck, to actually have programming that reflects the world we live in today. One of the stories I’m working on right now is that the attorney general of New York just brought suit again Exxon Mobil because they knew all the science in global warming, yet spent hundreds of billions of dollars to promote climate-change denial. So, if they knew that smoking killed you but lied about it and had a $200 billion dollar settlement — that’s for smokers. How big is the oil settlement going to be? This is just an example of programming that millennials are outraged by, because this is now their problem.
All these baby boomers are going to die off, and millennials are sitting there saying, “Not only did you fucking know, you didn’t do nothing, you lied to us to go the other way.” There should be rage, there should be responsibility in programming. It shouldn’t just be all about “The Voice.” It shouldn’t just be all about this vapid, vacuous crap that they put on. You don’t think that people are going to watch that? I predict — in fact, I’ll guarantee it, much like Joe Namath, and if I lose and whatever —
Swisher: I didn’t say people aren’t going to watch it, I said I wasn’t going to.
Smith: People are going to watch it in droves. And I don’t know where they’re going to watch it, but they will watch it, and brands will want to be beside it.
Kafka: I know Kara wants to be a brand artist now.
Swisher: I do, I do.
Smith: You should. You are a brand artist.
Swisher: I am not, I’m a brand fascist.
Smith: You just go out —
Swisher: I have one more question for you. Since you do talk about people saying, “You hoodwinked us,” what’s the thing that people say about you that is absolutely true? The criticism.
Swisher: You do hoodwink people, then?
Swisher: What’s the thing they say about you that is true? And then we’ll get to questions.
Smith: The thing they say about me that’s true. That I’m fat, maybe? That’s true.
Smith: I don’t know, what do they say about me that’s true?
Kafka: What’s the gossip, Spike? Shane leaves and goes to Iran — what do they say about him?
Jonze: He takes a lot of baths.
Smith: Yeah, that’s true.
Jonze: That is true.
Smith: That is true.
Swisher: I’ve never heard anyone say that about you, but thank you.
Smith: I take a lot of baths, I’m addicted to baths.
Swisher: This is you hoodwinking [Bob] Iger and Rupert [Murdoch] and the others.
Smith: Everybody. But it’s not Bob Iger and Rupert and — and everybody. You have to understand that when we were doing our Time Warner deal, they put 350 different executives through Vice. If you’re hoodwinking 350 executives, lawyers, accountants, due-diligence people, Ernst & Young — like every single fucking thing you’ve ever done in your life is looked at by hundreds of people — I’m not that good.
Swisher: I don’t know.
Jonze: Wait, have you been to the company?
Swisher: I have walked by it.
Jonze: You should come, because I think if you walk in the building and feel the energy — you walk down the halls, and there’s just so many young, creative, brilliant minds there. And I don’t know what the statistic is, but most of the employees are under 30. We are by far the old people there.
Swisher: You don’t strike me as millennials or Gen Ys.
Jonze: Definitely not.
Smith: We’re Gen X.
Jonze: But, I mean, if you walk in that office or any of the offices in LA or in London, it’s impressive, and I’m excited. That’s why I’m there. It’s an interesting place to be and I think it’s a good story to write, but if you walk in the building and meet these kids that are creating things, it’s a different story.
The bridge between what I’m watching and what the fuck I can do about it
Gillian Sheldon: I’m Gillian Sheldon, with Participant Media. Obviously, I love that you were talking about your mission, but how is the content that you’re creating really connecting to impact, particularly for millennials who are conscious consumers? They can all engage and watch this content and talk about what happened with Exxon and talk about these issues — but how are you creating that bridge between what I’m watching and what the fuck I can do about it?
Smith: That’s a great question. I think our old attitude used to be, “Our job is media, and it’s to shine a light on issues.” That’s the first step, and then it’s up to politicians and advocacy groups and voters and consumers to make that change. What we saw was exactly what you’re talking about — there’s a lot of frustration out there, and a lot of, “Okay, you got me, what do I do next?” On the positive side, when we did our “Killing Cancer” special, we were the fastest-ever funding campaign for the Mayo Clinic, which is pretty impressive for raising funds to fight cancer. And we realized the power of good content at that point.
It also opened our eyes to a whole new realm of issues. Vice doing health issues was not something you would have thought of three or four years ago. On the environmental side, on the political side, we recently had three of our journalists kidnapped in Turkey, and so we got very attuned to working with CPJ and international legal process of how to get people out of jail, and that brought us to whole new human rights issues. I think the biggest thing that we did recently was we went with President Obama to the —
Smith: — federal penitentiary in Oklahoma — the first time with a sitting president — and there was such a huge groundswell of support for that. That actually led to two bills being put on the Hill, tremendous pressure put on politicians. We worked with advocacy groups, human rights groups, both domestic and international, which has led to a lot of different policies, also lead to the president doing a historical commutation. So I think that we’re just beginning, and as we grow, advocacy and especially consumer advocacy and working with brands such as Unilever, who have said “we are going to be 100 percent sustainable,” which is just an insane mission for a brand to do. You have to look at brands like that and say, “Okay, well, if these guys are going to do it, then every other brand has to do that,” because that’s the only way that we win.
Jason Rapp: Hello, I’m Jason Rapp. I love this notion of being big, but doing things that don’t suck. If there’s one thing that sucks, at least from a video perspective, it’s coverage of this election. Even Showtime’s “The Circus” is an insult to circuses. How do you guys at Vice think about how you might cover this election?
Swisher: Are you covering it on the HBO show?
Smith: That’s a good question. We have a multifaceted sort of approach to it. We actually went through this yesterday with HBO. So, we’re doing a daily show, a daily news show with HBO, based on the success of the weekly show. And it’s an interesting time in America, because this election is sort of the greatest single content windfall that you could possibly hope for, because it’s completely insane. The problem is that because it’s absurd, it becomes “The Surreal Life,” it becomes a sort of lowest-common-denominator reality show.
What is happening — and what happened with Obama getting elected — is that you have a Gen Y flexing its muscles and almost being completely ignored, and you see that “Feel the Bern.” And what I find ironic is that a black Muslim terrorist or a hardcore communist can be elected or be considered to be elected in America, and nobody sits up and asks why that is. And it’s because there’s a whole new game in town, and people are going to have to sit up and take notice of that. So we look at — how do we reflect that?
And by the way, the other thing that we have to do is entertainmentize the issues, because at a certain point a lot of the Beltway shows a lot of traditional media is a bunch of old dudes talking about a lot of boring stuff, whereas a lot of this stuff, you can tell the story, and the story is very interesting.
Swisher: Did you say “entertainize”?
Swisher: Oh, okay, that’s just edumatainment.
Swisher: Okay, but meaning you would make it into — isn’t that the problem you’re just talking about, that it’s become —
Swisher: There was a tweet the other day — I thought it was the best tweet I’ve ever seen — after [Supreme Court Justice Antonin] Scalia died. It said, it seems like America is on its last season, the writers are just going fucking batshit-crazy. Like, why not? Everybody dies. Isn’t that a problem though?
Smith: No, but what I mean is doing it in an interesting way. So, for example, I was watching this thing where we go to New Hampshire — and I can’t believe nobody’s done this before, maybe they have, because every time I say it hasn’t happened, you bring up something —
Swisher: I’m super old.
Smith: — that maybe you saw once in the ’60s. We go to New Hampshire, and we go to this gun club. And we interview people in New Hampshire at the gun club, and it’s the oldest gun club in America, and they talk about “Live free or die,” and they talk about the founding of their state — like, this is like serious shit for these people. And then like, “You’re going to go to liberal New York, but we’re gonna watch you, and if you fuck up, we’re gonna vote you out of New Hampshire,” and all this stuff. And then they just go back to like machine guns and whatever. And when I talk about it, it’s TV or video or mobile, it’s a visual medium, and we’ve gone to this talking-heads format. For example, people here are probably bored — if I was shooting a machine gun against the Taliban right now, you’d be like, “I’m going to stay and have another drink.” But if we’re just sort of here going, “… and another thing that I think about media.” So you have to make it interesting, and I think that we’ve gone to this talk-radio graphics package bullshit that’s just boring.
Kafka: All right, let’s get Shane offstage so we can move to the machine-gun phase. One last question here.
Smith: Oh, shit.
Audience member: No, this will be a good one. First of all, just the juxtaposition of having ESPN onstage, and asking them about getting into digital or doing direct-to-consumer, and now pushing Shane on going from digital getting into TV is fascinating, but when you think about the comment John Skipper made about the price value of TV being great, and still kind of best value, I think a lot of your core millennials — kind of what I think of as the Vice consumer — probably doesn’t agree with that. Shane, as you look at the world, kind of from a high level, what would you do if you were Bob Iger or Philippe Dauman — what should these companies be doing? Because they obviously all want to put money into you as kind of their millennial checkbox right now, but what should they be doing?
Smith: Well, I think they’re not all the same company. I think what Philipe Dauman should do is run for the hills and cash your check. I think—
Swisher: I’m with you on that one.
Smith: I think that Bob Iger did exactly the right thing, and laid some bets on where things were going. One of those bets being us, but I think your question is a hard one to answer, because there’s going to be a consolidation in new media. There’s going to be a consolidation in old media. That’s happening now. It’s already happening. So there’s going to be fewer players, and those fewer players are going to be well-funded. Those players are then going to buy up all of the platforms, so you’ll see some sort of big deal with Apple, you’ll see a big deal with Amazon with Netflix, etc. Everyone is going to try to get this first position in the big network deals — all the big telcos, Sprint’s gonna get one, Verizon’s gonna get another, and then Vodafone’s gonna do a major deal. So there’s gonna be all of that stuff, but what people forget about, and I think one of the things, especially with ESPN, is HBO at 25 million or whatever can charge that premium. And we see that premium, it’s beautiful. But you need almost full distribution to get the real advertising money, and what people are forgetting here, and especially, like if you look at ESPN, ESPN still throws off a lot of money. That’s a great business, and if I can be in that business, I want to be in that business.
If you look at the next five years, is there going to be a complete move in platform? Yes. I’m probably one of the furthest along in that move, and I don’t know what the fuck’s gonna happen, so anybody that tells what’s gonna happen, they don’t know. No one can have a crystal ball and say, “That’s what’s gonna happen.” We think we’re gonna make some bets on mobile. We think the three-screen, the one-screen OTT model is right, and we think that global native versus 30-second spots and dots is the way to go, so we’re gonna put our money there. The one thing is, for those five years, you need to take that money, that advertising, because if TV is boring and if spot and dots don’t work but yet 75 percent of the world’s fucking ad dollars are still there, then that’s a lot of money that we can get for us to give to Spike so he can go make his content so we can go from No. 4 to No. 3 to No. 2 to No. 1.
Kafka: Shane, Spike, real quick — you guys are launching the [Viceland] network at the end of the month —
Swisher: Two weeks.
Kafka: A year from now, how are you going to define success? What does a success look like to you?
Kafka: Oh, Spike was going to say something.
Smith: Go, you do it.
Jonze: Well, I think I was already kind of saying it earlier, which is, “Did we make what was true to us?” Would we give this megaphone, give this production budget, give this cable deal that he’s made for us — did we give it to people that we think are worthy and exciting and inspiring, and did we get their voice out there? This thing that we’re making is this living organism that is, I think, to be played with. A cable channel — for us, working on it is a thing that we can mess with. It’s like not this sort of sanctisine —
Jonze: What’s the word?
Smith: He’s on a lot of Theraflu.
Jonze: I’m on a lot of Theraflu. Sacrosanct. It’s not this like precious thing, but it’s like a funnel right into people’s homes.
Smith: It’s a lab.
Jonze: Yeah, and let’s play with it — it’s a laboratory to explore and experiment and to mess with and to fuck with.
Smith: I agree with him. I think that we’ll make mistakes, and everyone will enjoy it when we do.
Swisher: And you’ll enjoy them enjoying it.
Smith: Yeah, I enjoy life. You know that.
Swisher: Yes, I can tell.
Smith: And by the way, media is the best business in the fucking world to be in. So all of this — if this is the hard part, then it’s better than selling shoes at Payless. I’ll tell you what success is. You guys are asking questions. Rich is asking questions, everyone is asking questions, hard questions, to people who have a business that’s hard to run. Whoever gets the first mover, whatever that is — that three-screen, one-screen, OTT, different programing day and day scale, monetized, having the brands, native that can’t be ad-blocked, all that stuff, get away from programatic up to premium — whoever wins that algorithm, wins everything, wins the race. And then you can talk about IPOs or getting bought, or no one can buy you at that point,or doing something with a big boy like an Apple or a Google, whatever it is. Then you’re transforming media. So whoever gets there first, wins. Who’s racing towards that goal?
Swisher: He just hoodwinked me. All right, excellent, thank you so much.
Kafka: Thank you, Shane. Thank you, Spike.
For more audio from Code Media 2016 and all our other events, subscribe to Re/code Replay on iTunes.
This article originally appeared on Recode.net.