Even with the aid of his prodigious recreational drug intake, it is doubtful the late Hunter S Thompson ever imagined that the “gonzo” journalism genre he pioneered in the 1960s would one day spawn a business worth $2bn.
This week Vice, the anarchic digital media group that is the natural heir to Thompson’s all-excess style, hit those heights. Time Warner is negotiating to acquire a stake of more than 30 per cent, which would value Vice at $2bn – not bad for a company that started life as a Canadian music magazine.
Shane Smith, Vice’s 44-year-old hard-partying chief executive, co-founder and largest shareholder, dislikes the word “gonzo” to describe Vice’s style of journalism. Eighteen months ago, when he came close to breaking a record for the volume of alcohol drunk in a Lunch with the FT interview (three bottles of rosé), he said he preferred the term “immersionism”, adding that Vice journalists “immerse ourselves and press record”.
It is a strategy that has propelled the company and its staff into 36 countries and turned it into a multiplatform brand, operating a global network of digital channels covering news, sport, technology and music. Vice has a news show on Time Warner’s HBO network, a branding agency that has produced campaigns for clients such as Vodafone and Nike, and production facilities that churn out 70 original news-driven video series.
Its video reports range from the hard-hitting and serious – slave labour in Pakistan’s brick kilns, for example – to the bizarre, such as the piece filed from the Westminster dog show (the US equivalent of Crufts) by a correspondent on LSD. This blend has won credibility with “millennials” and helped forge long-term relationships with companies such as chipmaker Intel, which are eager to burnish their brands with Vice’s edginess and cool.
Mr Smith has led Vice’s evolution from magazine to burgeoning digital empire. Stocky, bearded and with a fondness for tattoos, he was raised in Ottawa, the son of a computer programmer father and a paralegal mother. Thompson’s work was an early influence – his father gave him a signed first-edition copy of Fear and Loathing in Las Vegas – and as a teenager he embraced hedonism and the punk scene.
His outlook turned fatalistic after several friends died of drug overdoses. “When you’re 18, 19, you want to live fast and leave a beautiful corpse behind,” he says. “It’s kind of romantic, whereas now I’m a f***ing hypochondriac. But at the time I thought I was going to die anyway so I might as well go out there and suck the marrow from the bone of life.”
He began working as a journalist in the early 1990s, when he moved to Europe and ran a side line as a currency hedger. On his return to Canada he started Vice magazine in 1994 with two friends, expanding globally over the next decade. He was quick to realise that video would drive advertising on the internet and – encouraged by film director Spike Jonze, a long-time friend, and Tom Freston, a former Viacom chief executive who joined the board of Vice – he increased the company’s film output.
This strategy has won him plaudits. After a 2012 visit to the Vice headquarters in Brooklyn – and an evening drinking tequila with Mr Smith and his colleagues – Rupert Murdoch took to Twitter to declare: “Who’s heard of Vice Media? Wild, interesting effort to interest millennials who don’t read or watch established media.”
Several months later, Mr Murdoch’s 21st Century Fox group acquired a 5 per cent stake in Vice Media in a deal that valued it at $1.4bn. Now, a year on, Time Warner is poised to invest. It is discussing giving Vice control of its HLN cable news channel, allowing it to programme its own content.
The Time Warner deal is not yet completed and it is unclear if the terms will dilute Mr Smith’s control of Vice. The company has not disclosed how much equity he has but he is its largest shareholder: senior management controls 75 per cent.
He has poured scorn on the notion that he is motivated by money. In a 2011 interview with Forbes, he revealed that Mr Jonze had told him to “take money out of the equation. And that’s actually when Vice started making lots of money.”
But Mr Smith has an innate ability to grab headlines. In 2008, he smuggled a video camera into North Korea and secretly shot a film that went beyond limited western media reports on the country and became a hit online. He returned to the country in an official capacity with Dennis Rodman, the former basketball star, and members of the Harlem Globetrotters, arranging a rare meeting with leader Kim Jong Un. Lambasted by many as a stunt that ignored the country’s appalling human rights record, Mr Smith maintained the trip was a success. “We didn’t go over there to stop a geopolitical crisis,” he said afterwards. “We’re not trying to be Jesus Christ and solve the world’s problems.”
He also has a knack for timing. When Google decided to give seed money to companies and brands to persuade them to create digital channels on YouTube, Vice was selected. Two years later, its channels are among the most popular, held up by the video site as an example of how brands can connect with audiences online: YouTube will this month run television commercials singling out Vice News, one of the media company’s new ventures, and fuelling Vice’s promotional efforts.
Mr Smith spends much of the year on the road, reporting from global hotspots. Although he is married with two young daughters, having a family has not curbed his wanderlust and he often takes them with him.
He has turned Vice into a global brand but says he plans to keep expanding. “I want us to be the next MTV, ESPN and CNN rolled into one,” he once said. He will be a step closer if he completes the deal with Time Warner.
The writer is the FT’s media editor