On the surface, Vice and CNN appear to be polar opposites. Over the past 35 years, CNN has become the go-to channel for breaking news, while Vice has spent its 21-year existence finding creative ways to curse.
Even the companies’ respective leaders bristle at the comparison. Last year, Vice cofounder and CEO Shane Smith made his feelings about CNN clear when he said, “Everything they do is a fucking disaster.” Meanwhile, CNN president Jeff Zucker shrugged in response: “They produce 15 hours of television [a month]. We’re going to do that between now and tonight.”
The sniping belies the fact that Vice and CNN are both fighting for the same pool of advertising, sponsorship, and subscriber revenue, and both are pursuing remarkably similar strategies to win the future of the news business. The bulk of CNN’s revenue comes from cable subscriber fees ($710 million in 2014). But this won’t last forever. “CNN is essentially a forced subscription service,” says Newsonomics media analyst Ken Doctor. As the cable bundle erodes, “CNN will be in a very different kind of game, and its half-dollar per subscriber will be in jeopardy.” At the same time, global digital ad revenues are predicted to outstrip those of U.S. TV by 2017.
Vice, which was birthed as a free magazine in Montreal, now specializes in documentary-style episodes that feature super-immersive reporting, such as journalist Medyan Dairieh’s infiltration of ISIS. Similarly, Zucker’s investment in original CNN programming—most notably Anthony Bourdain’s Parts Unknown—provides a library of original programming that won’t grow stale with the next news cycle, can easily be disseminated and monetized across TV, mobile, and the web, and can command more premium prime-time advertisers than a typical nightly news or talk program. This bet on personalities who can breathe life into stories on topics from Iran to Bitcoin is a slightly cleaned-up version of Vice’s programming strategy.
The networks’ distribution strategies are now practically identical, popping up wherever people may want to get their news. Both Vice and CNN had inaugural Snapchat Discover channels, and Facebook tapped each company to join initiatives to help it promote the creation of more content within the social network.
Vice’s Smith and his cofounders have a huge lead in integrating advertising without scaring off their fans. In 2006, they started Virtue, an in-house agency that produces fresh content for brands—published on its site and anywhere else on the web—that still feels like stuff its viewers want to watch. Vice’s tech site, Motherboard, originated as a partnership with Dell, and Unilever is sponsoring Broadly, a female-focused video channel. CNN is playing catch-up on this front; in June, its parent company, Turner Broadcasting, announced Courageous, an in-house content studio that will use “journalistic instinct” to “produce relevant storytelling” for brands—and help CNN crack the code on native advertising.
While CNN tries to match its rival digitally, Vice is chasing the big dollars that are still available in traditional cable TV. Vice will soon have its own channel (the former History Channel spinoff known as H2) through its 2014 deal with A&E, which bought a 10% stake in the company. It will use the old H2 to push its lifestyle programming, which has the potential to garner higher fees and ad rates than news. Vice also scored a big deal with HBO to continue its documentary series on the pay network—and add a nightly news show on streaming service HBO Now. The company even has TV partners that run Vice news daily in France and Italy, along with a $100 million deal with Canada’s Rogers Communications to create a Vice TV channel. As a result, Vice is projecting $915 million in revenue for 2015, according to The New York Times.
With its hold on cable subscriber fees, strong ratings among younger viewers, and embrace of native advertising and digital video, CNN could maintain its dominance as the destination news brand of the future. Vice’s business model, though, is built for growth, and underestimating it will come at CNN’s own peril. So the fight comes down to this: Which tattooed aging rebel in a black T-shirt do you want to be your guide to understanding today’s world—Bourdain or Smith?