Those were some of the questions posed Thursday night at Hearst Tower during a Q&A with Smith, who wore a suit and tie for the occasion (and toted a glass of Scotch).
Hearst Magazines president David Carey, who noted that his company holds equity stakes and “sometimes board seats” on some of today’s disruptive media companies, including Vice, opened the talk by introducing the panel’s moderator.
“You’ll have two men on the stage tonight; one hails from Canada, known to be one of the great digital minds of our business, is known to use profanity on a regular basis, disrespects authority. The other person is Shane Smith,” Carey said.
Carey was of course alluding to Hearst’s very own disruptor, Troy Young, who oversees Hearst digital, and had, at one time, been controversial for his mandate to separate the company’s print and digital operations with its web titles reporting to site directors, not magazine editors in chief.
“I’m glad all the kids came out,” Smith said, looking out to the audience, before greeting Young. “I expected Hearst to be old and look like us.”
Young began his questioning, but warned the audience that Smith has the tendency to drift off topic, a slight understatement. The interview began with the interesting tidbit that Smith is one of the richest people in Canada, ranked by Canadian Business last year at No. 72 for a net worth of $1.27 billion.
Smith deflected a bit and talked about how he found success in such a volatile industry.
“I remember when I was young,” he said. “I used to be a fan — I’m still a huge fan — of Graydon Carter. He came from the same neighborhood as me in Ottawa. He came down here and started Spy Magazine and terrified New York. I was like, ‘A kid from Ottawa can terrify people in New York,’ so that was inspiration number one.”
Smith explained how he has hustled his whole life for money, but there came an “inflection point” once he became rich.
Taking money out of the equation, Smith said he realized: “We’re at a huge inflection point not just for media, but for culture.”
Young talked about their shared roots working at rival magazines in Montreal — Young at alternative weekly The Mirror and Smith at Vice magazine.
Smith noted, ironically, that even then Young and his colleagues at the other publications were slave to the mentality playing out in traditional media today. Smith, who was living in the office and taking welfare to publish Vice, made deals with Canadian business to springboard his magazine to a national level.
“The Mirror stayed in Montreal and tried to consolidate their market. What happened in Montreal, quite frankly, is still happening in media,” he said, noting that the other titles tried to “undercut” each other. “A $50,000 [ad] page would go for 50 bucks and a cup of coffee. You priced yourselves out of profitability…while you guys were fighting the status quo fight, we made a new fight, and that’s how we won. We won the fight that only we were fighting in. We rigged it.”
Although Smith’s point may hold some truth, there are many media companies doing exactly what Vice is doing in terms of platform expansion — the question is whether they will be able to do it better than the digital firm, or find an alternative path to success.
Young moved on with a barb, noting that Smith has “developed a reputation as a bombastic voice, in some ways not unlike Trump.”
“The thing that I find interesting about you, Shane, is that you are an incredible bulls—–r, but also a wonderful truth teller,” said Young.
“It’s bulls–t before it happens, it is a self-fulfilling prophecy after it happens,” Smith said. “I’m in the self-fulfilling prophecy era now.”
The ceo noted that if you “don’t believe in yourself,” no one else will.
“I think that the biggest — no offense to Hearst, you’re very smart and you make a lot of money, but you guys look so successful, that people are, like, Hearst is f—–g cracking,” he said. “I have a lot of people or whatever on the board, and when you sit with them, you go, ‘You don’t really know what you’re talking about.’”
Smith then went on to forecast the future of cable, explaining, “You’re going to see Viacom implode and probably something happen between Time Warner and Fox and there are going to be like five major media companies [that will] go to two-and-a-half. And then we’re the largest new media company and we’re going to become the fourth-largest or fifth-largest media company…or the third.”
The ceo noted that he hired Josh Tyrangiel from Bloomberg not because he has Vice values — he doesn’t, apparently — but because he’s the “enfant terrible of media.” Tyrangiel came to Smith with a plan to help Vice take on the CNNs and the BBCs of the industry.
“Josh is an angry young man who wants to shove it up their asses,” Smith said. “He’s aggressive.”
The ceo’s desire to dominate TV with its HBO programming and its Viceland channel is apparent. Despite broad distribution, Viceland has experienced a few ratings bumps to start, not to mention a dearth of programming to fill a 24/7 broadcast. But the company is working on that with a host of new shows and the renewal of “Gaycation” with Ellen Page and “Weediquette,” a series about alternate uses of marijuana.
“But you haven’t had a hit,” Young jabbed.
“We have,” said a peeved Smith.
“Someone said [to me], is he the modern Oprah?” Young mused, unspooling the question to mean whether the modern media mogul must be equal parts talent and ceo.
Smith said that isn’t a requisite but noted: “If you’re going to make content you better love content and you’d better understand what it is.”
Later, a young man from the audience asked Smith a more pointed question about how digital firms can succeed on YouTube, which shed light on the bigger problem for media companies today.
“The problem with YouTube was, much like Facebook now…Facebook has bought two-thirds of the new media companies without spending a dime because they own the majority of their mobile,” Smith said. “That’s why we’re trying to get onto all the platforms. If we can monetize on all the platforms, then we can get away from the hegemony of Facebook.”
Smith said Vice sells its own YouTube inventory, but that the video platform takes a fair amount out of the sale to pay their overhead.
“You’re giving another company your manifest destiny,” he said, noting that 85 percent of all online video is Facebook and YouTube. “So unless you’re on those platforms, you’re dead. But if you’re not on those platforms, you’re not making money, and so therein lies the rub. And that’s going to be the biggest challenge going forward for media companies.”