Vice Media raises $450 million for video expansion

Digital and broadcast group Vice Media intends to expand its array of online services following a $450 million investment by private equity firm TPG, announced on the 19th of June. One particular area it has identified as an expansion opportunity is subscription video on demand (SVoD). Vice has already experienced exposure to SVoD in Japan, where it recently launched a mobile SVoD service in April 2017 with Japan’s largest mobile network operator NTT Docomo. 

To date, Vice content has proved popular with the millennial generation. Vice reports that 76% of its audience falls in the 18-34 age range. As this is also the same age group most often associated with SVoD services (Ampere’s data suggests 49% of SVoD subscriptions in the UK in Q1 2017 were from those aged 18-34), launching an SVoD service makes sense. Based on Vice’s existing operations in Japan, and the target demographic, it is likely that mobile video will be a key focus in any new launch strategy.

Mobile video has been a key area of focus in recent periods for content groups and communications players alike. In the US uncapped mobile streaming service BingeOn was launched by T-Mobile USA in 2015, Verizon debuted its mobile video offer go90 in the same year, while more-recently AT&T zero-rated its virtual MSO DirecTV Now for AT&T mobility customers. In Europe, Deutsche Telekom launched a BingeOn equivalent, dubbed StreamOn, in Germany, and recently won a court case allowing zero-rating of services in the Netherlands.

The appetite of telcos in Western markets for mobile video places Vice in a good position to strike comparable SVoD partnerships with operators outside Japan. However, Japan is a unique market, with Japanese consumers consistently spending more on mobile content than their counterparts in other markets, and the success Vice has enjoyed in Japan might not be easy to replicate elsewhere. As a growing proportion of the population consumes video on smartphones, especially the younger demographics, finding the right operator partner for video delivery could play a key role in the success of a new SVoD service.