Vertical and
lateral integrations have propelled VICE from a free magazine to an
international multi-platform, vertically integrated brand with revenue of $100
million dollars in 2011 and estimated worth of $1 billion dollars in 2013 with
only around 3% of that coming from the magazine itself.
VICE has always been a free magazine, however they have a
controlled audience in that the magazine can only been found in highly vetted
select boutiques, cafes and bars. This
ensures that the magazine has a 100% pick up rate by the target demographic of
young urban trendsetters with disposable incomes.
The magazine is available globally and VICE have used their
online platform to gain an in-depth knowledge of their target demographic. As
VICE have a cult following internationally they have recognised that there are
common features amongst this demographic.
This accumulation of knowledge production is where the value lies.
VICE have vertically integrated into advertising. Their
agency Virtue produces content for big brand advertisers. They have a digital
distribution advertising network, AdVice, that allows brands to connect with
consumers on many other online platforms outside the VICE domain. But most
interestingly they have radically integrated laterally by offering entertainment
solutions and digital platforms for big name brands. A current example of this is The Creators
Project in partnership with Intel, which provides a digital arts and culture
channel. This allows Intel to stay in touch with their core demographic of creatives.
VICE are adept at generating maximum profit from their
content with successful moves into book publishing, music production and
management and video production. Currently in the process of creating their own
video player, which will ensure that their online video production will have a
long tail whilst being embedded into host sites and advertising revenue will be
split.
Vice continue to grow with incremental horizontal
integrations and are producing many new niche channels. Their success is tantamount to the interest
the brand has received from other huge media companies.
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