Monica Cancino

Bruna Furlan
Renata Silva
Luisa Rosas
Luis Lopez

Case #1 VICE
Marketing Leadership Capstone
06/08/2016

CASE #1 VICE

Business Strategy
BLUE OCEAN
The news media has traditionally been a red
ocean where news have been delivered through
publications,
broadcasts,
magazines,
newspapers, documentaries and web channels
appealing to an older more traditional audience.
With its somber tone, population between 18
and 34 years of age have been finding it difficult
to become loyal or follow a particular source of
information.
Vice created a blue ocean by breaking
with the idea that young people were not
interested on being informed about what was
going on around the world. Its owners realized
that it was not that Millennials did not care, it
was only that they found all traditional
approaches to be flat, not critical and lacking of
honesty. With this in mind Vice became a
unique brand breaking away from all traditional
ways of delivering information, building a
reputation for being provocative and delivering
politically incorrect content.
Through its different channels Vice has
managed to capture the attention of its target
market with articles, films and documentaries
that come out as very raw and brutally honest.
By creating this blue ocean Vice has managed
to grow strong for over 20 years and become
one of the most influential media brands,
subject to strategic alliances with well-known

CASE #1 VICE

companies such as Disney, HBO and MTV. The

companys estimated value is between $4 - $7
billion dollars (numbers vary through different
sources). Vice created demand through
differentiation in a new marketplace space with
a large opportunity to grow.

DISRUPTIVE INNOVATION
Vice created a new market disruption by
targeting Millennials which was a market not
served by traditional media chains. Vice
disrupted
the
major
traditional
news
broadcasters (CNN, CBC, CTV) and magazines
by delivering a punk kind of journalism, done
by punks (National Public Radio, 2014), where
information is given in a provocative, honest,
colorful and often upsetting way through a wide
variety of means (social media, films,
documentaries, magazine).

SWOT ANALYSIS

ONE PAGE PITCH

Strengths
Unique perspective of global news for more
than 20 years, covering broad subjects such as
day to day situations, trends, to political and
social issues, targeting Millennials.
Turned into one of the most influential media
brands in the world with more than 35 offices in
over 18 countries. (Widdicombe, 2013)
Has attracted investments from well-known
production companies (Disney and 21st
Century Fox) providing more resources.
Constant flow of content through its numerous
media (magazine, news division, film
production studio, digital channels, record
label, films, series and books).

Product
Broadcasting and digital media company
designed to appeal to Millennials.

Weaknesses
Content can be discriminatory or offensive
Tone has led Vice not to be taken too seriously
in terms of credibility.
Subject to negative press.
Limited target
Opportunities
Expand its Canadian identity.
Work on their alliance with Rogers to deliver
mobile news to Canadians.
Threats
Competitive environment of traditional news
companies.
Millennials interests are constantly changing.

CASE #1 VICE

Business model
Delivering journalism in a provocative and
brutally honest way with presence in almost
every mean of communication through its
different media.
Target market
Male and female ages 18 34.
With a higher education in progress or
achieved
Young professionals concerned about social
and political issues around the globe.
Competitive advantage
Unique way of delivering information.
Wide coverage through its different assets.
Dominance of Internet and social media tools.
Management team
Shane Smith (Chief Executive Officer), Andrew
Creighton (President), James H. Schwab J.D.
(Co-President), Suroosh Alvi (Co-Founder)
(Bloomberg, 2016).
Financial summary
Vices financial information is confidential. It
has claimed to have a value of between $4 - $7
billion dollars and with steady annual growths.
Funding
Marketing
Technological platforms
Keep their international presence.

3

Organizational Structure
Vice is not a typical media company, and therefore its organizational structure do not follow the
traditional hierarchies of most organizations. As stated by Shane Smith (Co-founder), Vice operates
on a free-flowing, quasi-hierarchical, non-traditional management structure (Gold, 2014). Vices
organizational structure have some attributes of a hierarchical organization and some attributes of a
flat organization. We can consider that Vices organizational structure is a Flatarchie they can have
flat structures and form ad-hoc teams that are more structured in nature. (Morgan, 2015)
It is not difficult to understand that a company like Vice, which began as a Punk Magazine,
would be stablished with a non traditional structure. Not all companies are the same, this is why
organizational structure varies according to a firms strategy, purpose and mission (Griffin, 2014)
Vices mission is to tell important, compelling stories in a way others dont, in a visceral way, where
the structure might not be relevant, but the content is the key element. (Gold, 2014).
Even though the structure of Vice contains some
elements of the basic structure of a magazine, their model
has been changing and adapting to the needs of the
environment and their growth. According to Bloomberg the
key executives are: Shane Smith (Chief Executive Officer), Andrew
Creighton (President), James H. Schwab J.D. (Co-President), Suroosh
Alvi (Co-Founder), Alyssa Mastromonaco (Chief Operating Officer),
Richard D. Beckman (Chief Revenue Officer), Ellis Jones (Editor-In-Chief
of Vice Magazine), Alex Miller (Global Head of Content), Eddy Moretti

(Bloomberg, 2016). They have some

specific organizational divisions as Vice.com, Vice Media and ViceMagazine, however it is not clear
how these divisions are controlled in the overall structure. The functions of the the key executives are
not clear and sometimes they are overlapped in multiple areas. Even when they have offices in more
than 30 countries, it is not clear as if they are controlled locally or by the head office. (See Appendix A)
Organizations with this type of structure are supposed to be dynamic in nature, and promote
creativity and innovation (Griffin, 2014). The main benefit of their organization is that they promote
freedom and flexibility to focus on innovation which creates a strong competitive advantage in their
work environment and in their business (Morgan, 2015). Vices model is quite powerful and more
disruptive than other structures, however, if they want to continue growing as a Media company, their
structure needs to be designed according to their local and international needs. They can continue
being non traditional but with a clear structure of functions, divisions and business units.
(Chief Creative Director)

CASE #1 VICE

Problems
Among many problems the company has faced
since its foundation, we highlight the following:
Vice Media created Viceland in 2016, a TV channel
with the purpose of attracting Millennials to this
mean of communication. However, according to
International Business Times, Viceland doesnt
seem to be bringing anyone to T.V. and the
audience is 77% lower than H2s the previous
channel (Schwindt, 2016). The reason behind this
might be the lack of credibility associated with their
advertising with companies that do not represent
the ideals of the company and their target audience.
These alliances might be linked with the large
amounts of money received that can influence the
free content Viceland claims to produce.
Another problem is that Vice has around 2
thousand employees worldwide in more than 30
countries (Sanati, 2016). However, Gawker website
asked some employees from Vice New York if they
are happy working there. The majority said that the
salaries are very low, even for executives. Most of
the employees are discouraged for not earning
enough money and also Vice does not share its
impressive financial gains with its co-workers
(Nolan, 2014). As a company who has been an
example for the young generation, Vice should put
its employees in the core of the business, providing
them with transparency and fair salaries. It would
make them feel more committed to the company
and glad for being part of their team.
Another dilemma surrounding the company is due
to the authenticity of Vices numbers and its market
value. Sanati mentioned in his article that the
companys worth from 6 to 7 billion in 2014 (Sanati,
2016), while Griffith from the Fortune magazine said
in 2014 that the company was worth $2.5 billion

CASE #1 VICE

(Griffith, 2014). This divergent analysis and valuation

highlights the difficulty in trusting the estimative
numbers. Vice is a private company which restricts
the access to its financial information, enabling the
market, investors and media to make their own
assumptions and predictions. This information
could be misleading to investors, since the business
may be overvalued.
Lastly, the CEOs of the company seem to be so
involved in the micro and macro aspects of the
business that their ultimate word and will might
prevail over other opinions. Also, their personal
image gets too much attached to the business. As
a result, this overwearing of their images and a
limited aperture to discussions could refrain the
company from being an innovative and neutral
environment, as the business ideals stand for.
All the problems above represent a risk to the
success of the business and could be mitigated
through several actions:
Becoming more aware about their social power of
influence as a mass mean of communication to their
target audience. This attitude can be reflected by
carefully selecting their partners and contents,
aligned with a transparent usage of money gained
from those alliances.
Given the limitation of financial regulations to going
public, Vice should be more transparent and
consistent to the numbers and data released to the
market as a way to gain more market credibility.
Along with this there should also be a more neutral
approach and clear strategic definition of the roles
in their high executive board in order to give better
direction and understanding of the business to its
employees.

5

Business Valuation
The valuation of a company can become a complicated task, because it is a subjective activity. There
are a lot of ways to value a business, therefore it might vary depending on the criteria you set for the
evaluation (Robbins, 2014). The most common ways to value a business rely on: (1) Asset Valuation,
(2) Market Approach (3) Income Valuation (Zwilling, 2009)

Asset Valuation
This metric stands for giving a dollar value to all
assets (physical assets and intellectual
property),
employees
and
customer
relationships (Zwilling, 2009). We might know
the total number of employees at Vice (2,000
worldwide), however the assets and the
audience numbers are still a mystery. Many
companies lie and inflate their numbers.

Market Approach
The metric which accounts for theoretical
demand in the market. This means the size,
growth potential, competition and its barriers,
and the valuation of similar companies (Zwilling,
2009). As a Media company, Vice can be
compared to big businesses, however there is
not a real competitive advantage in their
business model. Their growth potential and size
is unknown because of confidential concerns.

Income Valuation
Projections of a companys future cash flows,
and the earnings before and after taxes are
analyzed in this metric (Zwilling, 2009). Vice is a
private company and therefore the real digits
are unknown. Even though we might imply the
revenues, there are some inconsistencies
between what the company earns and what
their employees earn.

CASE #1 VICE

Based on these metrics to evaluate a company

we can guess that the real value of the
company is difficult to obtain. If the public had
access to the Financial Statements, the
evaluation could be more precise. Thanks to
investments
and
crossover
ventures,
companies like MTV, Rogers and Disney have
valued the company in between $4 to $7 billion
(Sanati, 2016). However, the only way we can
estimate Vices value is by the Market
approach. We believe Vices value can be
implied by the deals and current market
valuations.
As the last investment, Disney considered that
the 10% of the company was valued in
$400,000 dollars, so the current valuation of the
company would be $4 billon dollars. This is the
valuation we agree with at this point with the
information provided and due to all the assets
of the company, its value proposition,
innovation and customers perception.

6

References

Ault, S. (2016, 04 28). Variety. Retrieved 06 04, 2016, from Data U.S. Millennials Watch Netflix Series More Than Broadcast TV
Hits: http://variety.com/2016/digital/news/millennials-prefer-netflix-series-1201756677/
Bazilian, E. (2014, September 29). How Shane Smith built Vice into a $2.5 billion empire. Retrieved June 4, 2016, from
Adweek: http://www.adweek.com/news/press/how-shane-smith-built-vice-25-billion-empire-160379
Beer, J. (2016, 03 22). Fast Company. Retrieved 06 04, 2016, from Why is Vice ditching its anti-smoking past to work for
Philip Morris?: http://www.fastcocreate.com/3058114/why-is-vice-ditching-its-anti-smoking-past-to-work-for-philip-morris
Bercovici, J. (2013, August 19). Thanks to Rupert Murdoch, Vice is worth $1.4 billion. Retrieved June 4, 2016, from Forbes:
http://www.forbes.com/sites/jeffbercovici/2013/08/19/thanks-to-rupert-murdoch-vice-is-worth-1-4-billion-could-it-be-in-playsoon/#6aae16ef62b4
Bloomberg. (2016). Bloomberg Media. Retrieved Jun 04, 2016, from Company Overview of Vice Media, LLC:
http://www.bloomberg.com/research/stocks/private/people.asp?privcapId=129476275
Griffith, E. (2014, 09 04). Fortune. Retrieved 06 04, 2016, from Now worth $2.5 billion, Vice eyes TV network:
http://fortune.com/2014/09/04/now-worth-2-5-billion-vice-eyes-tv-network/Gold, H. (2014, Nov 16). Politico. Retrieved Jun
04, 2016, from Alyssa Mastromonaco joins Vice Media: http://www.politico.com/blogs/media/2014/11/alyssa-mastromonacojoins-vice-media-198855
Griffin, R. W., Ebert, R. J., Starke, F. A., Dracopoulos, G., & Lang, M. D. (2014). Business (Eighth Canadian Edition ed.).
Toronto, Canada: Pearson.Martinson, J. (2015, Jan 01). The Guardian. Retrieved Jun 04, 2016, from The virtues of Vice: how
punk magazine was transformed into media giant: http://www.theguardian.com/media/2015/jan/01/virtues-of-vice-magazinetransformed-into-global-giant
Kafka, P. (2016, 03 17). Recode. Retrieved 06 04, 2016, from Vice Doesnt Want to Talk About Vicelands Ratings, but CNN
Boss Jeff Zucker Does: http://www.recode.net/2016/3/17/11587064/vice-doesnt-want-to-talk-about-vicelands-ratings-butcnn-boss-jeffMorgan, J. (2015, July 15). Forbes. Retrieved Jun 04, 2016, from The 5 Types Of Organizational Structures:
http://www.forbes.com/sites/jacobmorgan/2015/07/15/the-5-types-of-organizational-structures-part-4flatarchies/#5daedb0e6249
National Public Radio. (2014). The Rise of Vice Media. Retrieved June 1, 2016, from
http://go.galegroup.com.ezproxy.humber.ca/ps/i.do?p=AONE&u=humber&id=GALE|A364236792&v=2.1&it=r&sid=summon&u
serGroup=humber&authCount=1
Nolan, H. (2014, 05 30). Gawker. Retrieved 06 04, 2016, from Working at Vice Media Is Not As Cool As It Seems:
http://gawker.com/working-at-vice-media-is-not-as-cool-as-it-seems-1579711577 Robbins, S. (2014). Entrepreneur.
Retrieved Jun 08, 2016, from How to Value a Business? : https://www.entrepreneur.com/article/66442
Oakes, O. (2016, 03 17). Campaign. Retrieved 06 04, 2016, from Vice Media agency produces
advertising for Malboro: http://www.campaignlive.co.uk/article/vice-media-agency-produces-advertisingmarlboro/1387967Vice. (2016, Jan). Vice Digital. Retrieved Jun 04, 2016, from Media Kit: http://scsassets.s3.amazonaws.com/int/masthead-8-14-large.png
Schwindt, O. (2016, 03 25). IBT. Retrieved 06 04, 2016, from Viceland Ratings: Heres How Many People Are Watching Vice
Medias New Cable TV Network: http://www.ibtimes.com/viceland-ratings-heres-how-many-people-are-watching-vicemedias-new-cable-tv-network-2343335Widdicombe, L. (2013, April 8). The Bad-Boy Brand. Retrieved June 3, 2016, from The
New Yorker: http://www.newyorker.com/magazine/2013/04/08/the-bad-boy-brand
Zwilling, M. (2009). Forbes. Retrieved Jun 04, 2015, from How To Value A Young Company:
http://www.forbes.com/2009/09/23/small-business-valuation-entrepreneurs-finance-zwilling.html

CASE #1 VICE

Appendix A

VICE MEDIA LLC MASTHEAD

Source: (Vice, 2016)

FOUNDERS Suroosh Alvi, Shane Smith

CHIEF CREATIVE OFFICER

Eddy Moretti

CO-PRESIDENTS

Andrew Creighton
James Schwab

EDITOR-IN-CHIEF

Ellis Jones

PUBLISHER

John Martin

DEPUTY EDITOR

Wes Enzinna

BUSINESS DEVELOPMENT

Ben Dietz

MANAGING EDITOR

Ryan Grim

ADVERTISING DIRECTOR

Shanon Kelley

SENIOR EDITOR

Jacob Z. Gross

DIRECTOR OF INTEGRATED SALES

Thobey Campion

PHOTO EDITOR

Matthew Leifheit

STRATEGIC PARTNERSHIPS DIRECTOR

Andrew Freston

COPY EDITOR

Rory Tolan

ART EDITOR

Nicholas Gazin

DIRECTOR OF PARTNER SALES

Meredith Katz

FICTION EDITOR

Amie Barrodale

ACCOUNT MANAGERS

REVIEWS EDITOR

Sean Yeaton

CONTRIBUTING EDITORS

Molly Crabapple
Jean Friedman-Rudovsky
Christopher Ketcham
Clancy Martin
Ken Silverstein

Harry Savinar
Brian Hanly
Cho Namgyal
Katie Stallings
Liz Mantel
Charlie Hyun

VICE MAGAZINE

DESIGN DIRECTOR

Matt Schoen

ADVERTISING ART DIRECTOR

Jordan Rein

ART DIRECTION AND LAYOUT

inkubator.ca

PRODUCTION & CIRCULATION

Kalynn Rubino

ONLINE OPERATIONS

Chris Powell
Thomas Lorbes
Ariel Beteta

ONLINE PLANNING

Morgan Morillo
Julien Khelif
Max Lederman
Karen Thorne
Emily Gladders

VICE.COM
GLOBAL HEAD OF CONTENT

Alex Miller

EDITOR, VICE.COM

Jonathan Smith

WEST COAST EDITOR

Jamie Lee Curtis Taete

SENIOR EDITORS

Harry Cheadle
Wilbert L. Cooper

POLITICS EDITOR

Grace Wyler

CRIME EDITOR

Matt Taylor

CULTURE EDITOR

James Yeh

STAFF WRITERS

Angelina Fanous
Mike Pearl
Allie Conti

DIGITAL NETWORK

Remi Carette
Lauren Zink
Alex Register

SALES ASSISTANT

Lindsay Beckel

SALES COORDINATOR

Lars Bengston

VICE MEDIA
CHIEF OPERATING OFFICER

Alyssa Mastromonaco

GENERAL MANAGER

Hosi Simon

WEEKEND EDITOR

Jennifer Schaffer

CHIEF OF STAFF

Niall Cooney

ASSISTANT EDITOR

Arielle Pardes

COMMUNICATIONS DIRECTOR

Alex Detrick

SOCIAL EDITOR

Hanson OHaver

COMMUNICATIONS ASSOCIATE

Caitlin Bruner

DEPUTY SOCIAL PRODUCER

Annalise Domenighini

CHIEF TECHNOLOGY OFFICER

Jesse Knight

EDITORIAL ASSISTANTS

River Donaghey
Zach Sokol

WEB OPS MANAGER

Brady Bryant

LEAD PRODUCT MANAGER

Dan Hockley

CONTRIBUTORS

COMPTROLLER

Richard Bisson

WORDS
Hugo Anderholm, Max Daly, Ryan Faith, Jonathan Galassi,
Juan Pablo Galln, Flaminia Giambalvo, Mark Hay, Haisam
Hussein, Ryan Max, Sam McPheeters, Brian Merchant, Jack
Mills, Davide Monteleone, Chris Nieratko, Samuel Oakford,
Lauren Oyler, Theodore Ross, Johnny Ryan, Roberto Saviano,
Nathan Schneider, Wyatt Williams, Edith Zimmerman

DIRECTOR OF FINANCE

Angela Zucconi

ACCOUNTANTS

Paul Provenzano
Debby Ma
Saheed Ibraheem
Leslie Herbert
Nakuj Vittal

PHOTOS
Eve Arnold, Jen Davis, Flaminia Giambalvo, Bruce Gilden,
Nina Leen, Joseph Maida, Davide Monteleone, Daniel Molina,
Chris Nieratko, Samuel Oakford, Bobby Scheidemann, Cynthia
Talmadge, Andrs Vanegas
ILLUSTRATIONS
Heather Benjamin, Brandon Celi, Alessandra De Cristofaro,
Jacob Everett, Stephen Maurice Graham, Haisam Hussein,
Richie Pope, Geffen Refaeli, Johnny Ryan,
Ole Tillmann, Armando Veve

GENERAL COUNSEL

Jon Lutzky

CONTACT
MAGAZINE EDITORIAL/VICE.COM

editor@vice.com

SALES

sales@vice.com

COMMUNICATIONS

press@vice.com

LEGAL

legal@vice.com

SUBSCRIPTIONS

subscriptions@vice.com

MAGAZINE DISTRIBUTION

distro@vice.com

VICE NEW YORK

99 North 10th Street, Brooklyn, NY 11249
Phone 718 599 3101 Fax 718 425 0337
VICE LOS ANGELES
589 Venice Blvd, Venice, CA 90291
VICE MONTREAL
127 B King Street, Montreal, QC H3C 2P2
VICE TORONTO
159 Dufferin St., Suite 100, Toronto, ON M6K 1Y9
VICE UK
New North Place, London, EC2A 4JA
VICE AUSTRALIA
PO Box 2041, Fitzroy, Victoria, 3065
VICE NEW ZEALAND
PO Box 68-962, Newton, Auckland
VICE SWEDEN
Markvardsgatan 2, SE-113 53 Stockholm
VICE DENMARK
Bremerholm 1, DK-1069 Copenhagen K
VICE ITALY
Via Watt 32, 20143, Milano
VICE GERMANY
Rungestr. 22-24, 10179 Berlin
VICE NETHERLANDS
PO Box 15358, 1001 MJ Amsterdam
VICE BELGIUM
Lamorinirestraat 161, B-2018, Antwerpen
VICE FRANCE
21, Place de la Rpublique, 75003 Paris
VICE IBERIA
lava 140, sobretico, 08018 Barcelona
VICE AUSTRIA
Floragasse 3/1, 1040 Vienna
VICE SWITZERLAND
Geroldstrasse 33 8005 Zurich
VICE MEXICO
Colima 235, Col. Roma, Del. Cuauhtemoc, DF 06700
VICE BRAZIL
Rua Periquito 264, So Paulo, SP, CEP 04514-050
VICE BULGARIA
5 Ogosta str., 1124 Sofia
VICE CZECH REPUBLIC
Hatalsk 1, 11000 Praha 1
VICE ROMANIA
Strada Icoanei, nr 92Bucharest sector 2
VICE POLAND
Solec 18/20, 00-410 Warszawa
VICE RUSSIA
4th Syromyatnicheskiy Lane, 3/5, Building 5, Moscow, 105120
VICE CHINA
Suite 307, 94 Dongsi Shitiao, Dongcheng District, Beijing, 100007
VICE JAPAN
3-31-5 Sendagaya, Shibuya-ku, Tokyo, 151-0051
VICE GREECE
Kifissias Ave. 10-12, 15125 Marousi, Athens
VICE COLOMBIA
Calle 56, n 5-21, Lado B, Piso 3, Bogot

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CASE #1 VICE