Left Wing Digital Media COLLAPSING, VICE Investment TOTAL LOSS
Left Wing Digital Media COLLAPSING, VICE Investment TOTAL LOSS. Disney recently announced that it is taking a 510M dollar loss in their VICE media investments. This news comes shortly after VICE shuttered several of its brands and laid off significant portions of its staff over the past few months.But the news isn't only about VICE. We have seem many left wing and far left media brands take huge hits, collapse entirely, or get sold for extremely low evaluations in recent months.One reason this may be happening is that these companies bet on far left and social justice content, content that is too fringe for average people to understand or relate to.In a report from last year News Whip shows that right wing and conservative media has been dominating on Facebook while left wing media slowly shrinks away.
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In a recent filing, Disney announced their $400 million investment into Vice Media is now worthless.
And this is some pretty bad news for Vice, considering in November they laid off 15% of their staff, in February another 10%, and it was recently announced they were going to be shuttering several brands.
Vice was once considered the golden child of digital media, with an evaluation near $5.7 billion, but it would seem that they peaked, and they're now on the back end of the bell curve.
The bad news in digital doesn't just affect Vice, however.
We've seen many digital brands either collapse or be sold for a fraction of their true value.
And there's a lot of reasons for this.
Many people might speculate that these companies are trying too hard to pander to a political faction.
But there's another very important point that needs to be brought up, and it's that advertising space online is being taken over entirely by Facebook and Google, and through this duopoly, they're shutting out brands they don't like, and changes to the algorithm negatively impact these big companies.
And the sad truth is, it will affect us on YouTube as well.
Today, let's take a look at the initial reports about Vice and their investment, and some other news involving digital media and the ad market duopoly.
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From Vox, Disney put more than $400 million into Vice.
Now it says that investment is worthless.
A now familiar story.
Investors say they overvalued a high-flying digital publisher.
The story says that Disney made the biggest bet by putting more than $400 million into the swashbuckling digital publisher.
Now, Disney says all of the money put into Vice has been incinerated.
In investor filings Wednesday, Disney said it no longer thinks it will ever get any return on the investment it made in Vice, a company that at one point was supposedly worth $5.7 billion.
Vice is still worth something.
In some investors' eyes last week, a group of lenders said they put a fresh round of $250 million into the company.
Vox says, Disney's accounting decision is yet another example, perhaps the most stunning one, of the turnabout we've seen in digital media over the past few years.
Investors have decided that high-flying publishers that once confidently explained that they'd created a new media paradigm are now worth very little or even less.
Here's a partial roll call familiar to some of you.
Mike, which raised more than $60 million, sold for less than $5 million late last year.
Mashable, which was valued at about $250 million in 2016, sold for less than $50 million in 2017.
The properties formerly known as Gawker Media, plus The Onion and other sites, just sold for a price that's likely well below $50 million.
Univision, the TV conglomerate which sold them off, had paid $135 million for the Gawker sites alone.
In 2016.
And then rather interestingly, Vox Media recognizes that they too are subject to the same rules,
saying, "...we don't know the value that Comcast, which put a
collective $600 million into Vox Media and BuzzFeed over the past few years, now thinks those two publishers are
worth. But it's a reasonable bet that Comcast thinks they are worth less than it thought in 2015."
Vox makes an interesting reference to the Facebook and Google duopoly over ad revenue on digital media, and we'll come to that later.
But they do make another really interesting point.
It would seem that Disney's loss exceeds the amount of money it actually put into Vice.
They say, Disney declined to comment, but one bit of language in Disney's quarterly filing Wednesday is telling.
Disney describes the $353 million dollar impairment charge it took on Vice as a write-off, which in accounting speak means there's nothing left to get rid of after this.
It's all gone.
They say, if you've been doing the math, you'll note that $353 million dollars plus $157 million is $510 million dollars, well more than the $400 million dollars Disney invested directly in Vice.
They add, since Disney won't comment, we will assume that the additional sum includes Vice investments that Disney owned through A&E.
The TV programmer that Disney owns along with Hearst, which also backed Vice, as well as $70 million that 21st Century sunk into Vice.
That ownership stake transferred to Disney earlier this year when Disney bought a good chunk of the Fox Empire.
So it's not just the money that Disney put in Vice, it's Fox as well, and also A&E.
Disney is eating a massive half a billion dollar loss over Vice Media.
And I gotta say, a lot of us who know the digital space We saw this coming.
In fact, Shane Smith himself said several years ago there was going to be a bloodbath in digital media.
He wasn't hiding the fact that digital media was going to get hurt by changes in the media landscape.
These companies, they wanted in, and it was a mistake.
Now, for those of you that don't know, I used to work at Vice.
I was, in fact, the founding member of Vice News.
And at the time, when I joined, we saw Vice skyrocketing.
It seemed like it would never end, but those of us who were smart enough knew, at some point, things would have to turn around.
And it's been a string of bad news for Vice over these past several months.
This story in the Wall Street Journal.
Back in November, Vice Media to shrink workforce by as much as 15% as growth stalls.
We then saw in February, Vice Media to reorganize and lay off 10% of its staff.
And then just three days ago, the Vice Union tweeted that Broadly, Tonic, and Waypoint no longer exist.
They have been folded into Vice.
Those three brands operated as independent verticals.
Basically their own websites that exist underneath vice.com.
You could go to waypoint and see nothing but waypoint content.
But now they're being shuttered.
The vice union is asking vice to keep the brands alive at vice.com.
What that basically means is you can't go to those sites anymore.
They're gone.
They will probably lay staff off.
But someone will still be writing gaming content or feminist content under those names.
Essentially, if Vice.com is going to write something that's about video games, they'll just tag Waypoint on it.
But at the end of the day, the vertical is gone.
Now let's talk about why these companies are collapsing.
It's entirely possible that the digital media landscape doesn't support this kind of venture, but I don't think that's true.
In fact, I think the thing is, these companies bet on fringe politics that don't work, that people do not like, and I have no idea why.
But we can go into my experience working with these companies in a second.
First, this is a report from Newswhip.
It shows top publishers from left to right in 2018.
We can see that the Daily Wire got 132 million engagements and for the left, The Root only got 25 million engagements.
What this says to me is that digital content when it's conservative does absolutely fine.
Although we do see many of these platforms censoring mostly conservatives, we also see that the left, while they aren't censored nearly as much, they don't even get close Close to the engagement.
Only $25 million for their top publisher.
But in a separate section from news organizations, there's an interesting phenomenon.
Fox News with 99 million engagements and Occupy Democrats just after with 95.
This means that conservatives get their news from legitimate news sources, albeit a partisan one, and the left is getting their news from a conspiracy theory clickbait meme page, which I don't really understand.
Something is happening, and I've gone over this data quite a bit.
In this chart from NewsWhip, we can see right-wing versus left-wing publishers' total interactions, and the right just gets way more interactions than the left does.
I'm gonna have to bet that these companies decided to run on a left-wing message for some reason, and it's something that people don't understand or relate to.
It's not so much about being conservative, but it's about there being no middle ground.
I have often said and I have made many, many videos pointing out that the left just keeps going further and further left and the right only moves slightly to the right.
So what I see happening is people like me who are kind of moderate left-leaning, we look to the left and we see this fringe insanity.
What are they doing and what are they talking about?
Well, it's likely because these are young people fresh out of college who learned a bunch of progressive social justice ideas and they bring them into these companies as these companies look to hire cheaper staff.
For the rest of us in this country who believe in more moderate policy, which is basically the majority of the country according to Gallup, we look at the left and think, that's nuts.
And when you look to the right, it's only slightly more right than it's ever been.
So when I see the Daily Wire, And I look at their stories, I say, yeah, I disagree with their perspective and their politics, but that's not incorrect.
Then I look at these other media outlets, Vox, Vice, Buzzfeed, etc., and I'm like, that's just plain wrong.
Or they're pushing some weird nonsensical anti-science position.
Now don't get me wrong, there are conservatives who are anti-science too, it's not unique to the left.
But they're not the mainstream right.
There certainly are some mainstream right people, but the left is overtly anti-science, denying biological sex.
It's the weirdest thing.
So what's a moderate to do?
I'm certainly not going to read these weird fringe websites, and thus they do bad.
I don't think politics is the sole reason, but looking at the data, who are you going to read?
Fox News or Occupy Democrats?
I'm not going to go to Occupy Democrats for my news.
No, I'd rather go to Fox News.
It's partisan.
I disagree with their opinions, but at least I know it's real reporting.
And this, in my opinion, is why many of these companies are failing.
But there is another really important aspect of the story.
And it's that Facebook and Google own the space.
If Google wants to, they can derank my videos, which they do, and then my videos are gone.
And you'll never see them.
People can vanish.
Google has arbitrarily banned people, as has Facebook.
If they control the ad space, they can just decide.
Vice, you're worthless today.
And that's basically what happens.
Facebook changed their algorithm to derank news from publishers and promote content from friends and family.
And all of these companies took a massive hit to their revenue because they were getting less views.
This led to layoffs.
We cannot have tech giants controlling everything.
I'm not familiar with eMarketers, so take it with a grain of salt, but this is typically true.
We can see this data here, that in 2018, Google had 40% of advertising revenue.
Facebook had 22%.
Instagram had about 5%.
By 2021, they expect Google to be at 36% and Facebook to be at 28%.
Facebook and Google control the majority of digital advertising revenue.
And there are a million and one reasons why this is nightmarish and dangerous.
The people who run Facebook and Google have political opinions.
They place those political opinions into how the system functions.
They choose who to ban and why to ban them.
They set the rules.
Something interesting happens.
In this story from the Texas Tribune, Texas is proposing a bill that will allow states to sue social media companies like Facebook over free speech.
See, what happened was, Republicans in Texas wanted to run an advertisement that was pro-life.
Facebook decided they weren't allowed to do that.
That's an overtly political decision.
Now they claimed it had to do with spam.
However, Texas Republicans had a similar ad for different subjects that were considered to be fine.
So why this one particular advertisement?
Well, the Texas Republicans feel it was a political choice.
If Facebook and Google control ad revenue, and they control the attention market, the majority of it, they can shut out political ideas they don't like.
And that's bad for everybody.
Sure, it's negatively impacting Republicans now, but it will certainly come for the left.
Don't think you're immune to this, and don't let them have this power.
But to bring everything back to the initial story, we can see that these companies who push left-wing politics just don't do that well on Facebook.
And right-wing publishers do way, way better.
We need only look at this chart one more time.
And I've shown this several times.
But look at this.
The Daily Wire with 132 million engagements and The Root with only 25.
It stands to reason the left has gone off the rails.
They've gone too far left.
So it's unrelatable.
The right is kind of in the same place, so at least moderates can kind of relate to it and are more likely to read it.
I know firsthand from working at Vice and Fusion, which is now called Splinter News, that this push didn't work.
It's one of the reasons I left Fusion.
They thought if they went full woke, they'd make money, but in fact, they got woke.
And went broke.
And the data shows it.
The same is true for Vice, for Mike, etc.
But let me know what you think in the comments below.
We'll keep the conversation going.
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