Here’s what most of you people reading this article don’t realize about online media: most big websites you see and visit are losing money. In fact, they are losing TONS of money. It goes something like this: Digital publishers come up with some really cool idea. They convince moronic investors that said idea will make money BEFORE it makes money. They assemble a massive staff, put tons of money into the website and expect advertisers to come begging for ad space. In a nutshell, that’s kind of how this landscape works. While it’s not quite the dot com boom of the last 90s and early 00s to a lay person, that’s the idea. The problem is, until you have a product that proves it can make money and draw a huge audience you will not attract advertisers or anyone else for that matter.
So the next time you visit some massive site that’s not an e-commerce site or social media site, rather it’s an “entertainment” site, know that’ it’s losing money. HOWEVER, there are some out there who do it right. Vice Media is on the cusp of very much doing it right. Their revenues continue to climb and they are proving that this stuff can actually work if done right. In fact their last year of revenues topped $1 Billion and they just got a $450 million investment from TPG, a huge private equity firm.
“Media is probably at its most dynamic, most evolutionary time in its history,” Vice CEO Shane Smith said in a statement, noting that Facebook and Google are “taking an ever-growing piece of the online advertising pie.” He continued that networks must “be nimble, smart and fast-moving.”
Vice will use the funding to launch Vice Studios, which will be dedicated to producing scripted programming for digital and linear distribution. The studio will add to Vice’s stable of documentary, news and unscripted programming. Vice recently acquired a majority stake in U.K.-based Pulse Films to help jumpstart its scripted programming efforts.
I’d like to thank Shane for the simple reason that little dudes like me will benefit from the growing perception that sites that actually write good content and draw audiences will thrive. TVovermind’s growing month after month and while we have no plans for investor money, I hope advertisers are watching. Whee!
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