Channeling CBS legend Bill Paley.

Photographer: Frederick M. Brown/Getty Images

Vice Media's Throwback to Golden Age of Radio

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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In the late 1920s and early 1930s, William Paley was the chief executive officer of a new-media startup. "Also the chief accountant, the program director and the talent scout," he recalled in his memoirs decades later.

His most important job, though, was persuading advertisers to spend money with his fledgling Columbia Broadcasting System. The first big advertiser, Majestic Radio, was an easy sell. Its main competitor, Radio Corporation of America, owned CBS's much-bigger rival, the National Broadcasting Corporation. He wrote:

But most of our advertisers -- the vast majority -- had to be wooed to CBS, and the method I used was to entice them with good ideas. In our offices, my associates and I would dream up radio shows of all types. I would take our best ideas to an advertiser and say, "If I could get you so-and-so, would you agree to give serious consideration to that program?" If there seemed to be some real interest, I would then approach the entertainer and say, "What if I could get you so much money for a weekly show, would you …?" I would then bring the sponsor and the artist together in the studio for a live audition. If it clicked, a new CBS program was born.

This is the kind of thing that people who run advertising-supported media startups have to do if they wish to succeed. They have to create content with advertisers in mind and make advertisers believe that they know more about reaching and persuading audiences than the advertisers do. Along those lines, Paley attributed much of CBS's early success to the research that his sales promotion chief, Paul Kesten, conducted and disseminated on Americans' listening and spending habits.

It also helps to have somebody with whom advertisers want to spend time. Somebody like, say, Bill Paley, who after a 12- or 16-hour day at the office would go back to his triplex apartment at Park Avenue and 58th Street to change into fancy clothes before heading out on the town. (This routine also necessitated hiring a man to drag him out of bed in the morning "no matter what I said or did.") The Central Park Casino was one favorite hangout; the Crystal Room at the old Ritz-Carlton another. Paley made a point not to socialize with work colleagues and "advertising agency men," instead gravitating to musicians, writers, movie magnates and brilliant, beautiful women (two of whom he married). But that must have just added to his allure with the ad guys.

I started reading up on Paley a few weeks ago after a conversation at a dinner party about Shane Smith, CEO of Vice Media. My interlocutor -- himself a new-media executive -- conjectured that one of Vice's big attractions for advertisers was simply that they wanted to hang out with the colorful Smith.

Such fun that must be! The guy "is most at home holding court in the backroom of Hotel Delmano [a Brooklyn cocktail bar] over caviar, wine and margaritas," the Wall Street Journal reported in an account of a day in Smith's life earlier this year that also revealed that he "drops the F-bomb" 15 times in a day. Bloomberg's Stephanie Ruhle and Max Abelson found out that he spent $300,000 on dinner for 12 (or maybe it was 25) after a lucky run at the Las Vegas blackjack tables in January. Actually, this sounds more tiring than fun. But that's probably just me -- I couldn't have kept up with Bill Paley, either.

I'm also not a millennial, a demographic that VICE is apparently uniquely adept at communicating with.

"We want to learn from them," said Nancy Dubuc, A&E Networks' president and CEO, earlier this year at New York's Paley Center for Media. "They're talking to a generation that we're struggling to connect to."

Yep, same Paley. The quote is from "The Cult of Vice," a big article in the current issue of the Columbia Journalism Review that attempts to explain Vice's appeal and assess its prospects. Author Chris Ip couldn't focus on the ineffable appeal of Shane Smith, because Smith wouldn't talk to him. Advertisers read the Wall Street Journal, the people at Vice probably figured, but they don't read CJR. Also, a CJR article was likely to focus on the potential conflicts between Vice's role as advertisers' and TV networks' conduit to the millennials and its aspirations as a news organization -- which Ip's piece in fact does.

The potential conflicts are definitely there. Vice aims to give advertisers' videos the same "immersive" feel as its own, and Ip writes that "the wall between editorial and advertising … can be porous." But that's kind of the point. Vice's comparative advantage is its editorial sensibility, and it makes money by renting that sensibility to advertisers, HBO and soon, A&E Networks.

Decades after its startup days, when CBS was the seemingly impregnable "Tiffany Network," it could afford a different, more distant relationship with its advertisers. Maybe that will come to pass for Vice and other media upstarts of today. But I kind of doubt it will ever be quite the same.

Until cable TV came along, bandwidth and other constraints made it impossible for anyone new to mount a serious challenge to radio and TV incumbents. (ABC was the former NBC "Blue Network," spun off in 1943 in response to pressure from the Federal Communications Commission.) Online, there's no barrier like that. Succeeding in media (advertising-supported media, at least) will probably be a continuing struggle to persuade advertisers that you know something they don't -- and maybe also that you'd be fun to party with.

  1. Fun fact: His ghostwriter was Fortune magazine's Geoffrey Colvin.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor on this story:
Paula Dwyer at pdwyer11@bloomberg.net