Left-Wing VICE Preparing To File For Bankruptcy

The once-highflying media company VICE is reportedly on the brink of filing for bankruptcy, which would be a stark turn of events for a company that enjoyed a meteoric rise in the early 2010s, as platforms like Facebook and Twitter made it easier than ever for niche media outlets to attain a huge following. Today, however, companies like VICE are struggling to monetize their audiences, and many new media organizations, including BuzzFeed News, are shedding staff or closing down entirely.

The news of VICE’s potential downfall was first reported by The New York Times, which wrote that while the company has been shopping itself around to prospective buyers, it may still be forced to declare bankruptcy. At least five companies have expressed interest in acquiring VICE, according to an unnamed source cited by The Times.

VICE’s former investors had high hopes for the company, which began as a small Canadian magazine in the late 1990s before morphing into an online juggernaut. In 2017, after a funding round from private equity firm TPG, VICE was valued at $5.7 billion. But that valuation has since plummeted.

A bankruptcy filing would mark a sad ending to VICE’s story, one that emerged from the “new media” movement that sought to take on more established networks such as Time Warner and NBCUniversal. VICE, which made its name by producing edgy, youth-oriented content on platforms like YouTube, was poised to be one of the stars of this movement. But the vast majority of digital media companies are struggling to stay afloat, with a select few—such as BuzzFeed and Vox Media—thanks to significant funding from venture capital firms.

The big question now is what will become of VICE. If it files for bankruptcy, its lenders are likely to oversee a restructuring that would involve cutting back on staff and significantly paring down operations. But even if VICE finds a buyer, it’s likely that the company will have to make significant changes in order to remain viable.

In other words, the days of media startups relying on venture capital funding and digital advertising revenues may be numbered. These companies will need to come up with a new business model if they want to survive.

What Went Wrong for VICE?

At its height, VICE was riding high on a wave of popularity that was fueled by the demand for edgy, irreverent content. Through an extensive web of platforms and social media channels, the company reached millions of young adults, who flocked to VICE to watch documentaries on topics like drugs, sex, and technology.

VICE was one of the first media outlets to recognize the power of online and mobile video, and its approach to distribution was one of the key factors behind its success. From YouTube to Snapchat, VICE was everywhere, and its videos racked up millions of views.

But despite this, VICE faced significant challenges. The company was famously resistant to advertising, instead relying on a variety of other revenue streams—including sponsored content, branded events, and documentary films—to make money. While this approach worked well in the early days of online video, when brands were still trying to figure out how to advertise online, it became less effective as ad platforms like Facebook and Google began to dominate the space.

In addition, VICE faced criticism over some of its journalistic practices, including allegations that it had engaged in “fake news” and that it had allowed its editorial standards to slip in pursuit of audience growth. Some former employees of VICE have suggested that the company was too focused on making a quick buck and too willing to sacrifice its journalistic integrity in the process.

Finally, VICE may simply have overextended itself. The company built up a sprawling media empire that stretched across multiple platforms, including print magazines, a television channel, a record label, and a creative agency. This model may have been too unwieldy to sustain, and it likely put too much pressure on VICE’s already-strained finances.

The Future of Digital Media

The fate of VICE is just one example of the broader challenges facing digital media companies today. As the traditional ad-supported media model breaks down, these firms are being forced to find new ways of generating revenue. Some have turned to subscriptions, while others are relying on e-commerce or events businesses.

Many industry insiders believe that the future of digital media belongs to companies that can build loyal audiences around niche content. By tailoring their offerings to specific audiences, these companies can attract fans who are willing to pay for their content.

Another strategy that has proven successful for some digital media companies is to focus on quality over quantity. Rather than churning out an endless stream of clickbait-y headlines, these companies are investing in in-depth reporting and analysis. This approach allows them to differentiate themselves from the horde of low-quality competitors.

Ultimately, however, there’s no one-size-fits-all solution for digital media companies. Each organization will need to find its own path forward. But one thing is clear: if companies want to succeed in the increasingly crowded and competitive digital media space, they’ll need to be innovative, flexible, and willing to take risks.

The Bottom Line

VICE’s potential bankruptcy is a sobering reminder that no company—not even one that once commanded a $5.7 billion valuation—can afford to rest on its laurels. As the media landscape continues to shift, companies that fail to adapt will be left behind. Whether VICE is able to weather the storm and emerge stronger on the other side remains to be seen. But whatever happens, it’s clear that the digital media industry is in a period of flux, and the companies that are able to navigate this transition will be the ones that survive.