Last month, Vice CEO Shane Smith told CNBC his digital media company would generate nearly $US1 billion in 2015.
From that statement, you might assume that Vice would recognise $US1 billion more in revenue on December 31 than it did on January 1.
But The Wall Street Journal’s Keach Hagey has been speaking with people who say they have seen Vice’s actual metrics, and they suggest that $US1 billion estimate seems inflated. They say Vice will actually generate less than $US500 million this year, about half what Smith’s statement may have led people to believe.
Vice asserts that the near $US1 billion figure cited by Smith is accurate, but it takes into account bookings completed in 2015 that don’t necessarily result in the company getting paid in 2015.
For example, an ad sales representative may close a multi-million-dollar deal with a brand in 2015 that has a 2016 run date. The advertiser would then pay for the bulk of campaign when it’s completed, or even months after the campaign ends. Still, Vice can talk about the revenue in 2015 when the paperwork was signed instead of 2016 when the cash hits its bank account.
This is tricky because Vice is counting future revenue today, which is slightly misleading.
A Vice spokesperson gave Business Insider the same statement it gave WSJ on a call Tuesday morning: “We don’t view any discrepancies. We’re on pace to book a billion dollars. That level of activity includes bookings and revenue that get delivered this year, and it would also include activity this year that results in near-term commitments going forward.”
Either way, $US500 million is a lot of revenue. Vice generates money a few ways, but one of the largest sources of income is through television deals.
For months, Vice has been rumoured to launch a television channel through one of its investor, A+E Networks. But that deal, which was expected to be completed, up and running by this fall, has hit “a series of roadblocks,” according to WSJ. It should announce a deal with A+E soon to take over HL2, and the channel should be up and running by Spring of 2016.
The WSJ also reports Vice is close to getting another $US200 million in investment, this time from Disney.
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