According to media reports, The Walt Disney Company DIS has invested another $200 million in Vice Media, the youth-oriented media and news organization, known for its coverage of current affairs for the millennial generation.
Last month, Disney had made a similar investment in the organization. Now with the recent investment, the valuation of Vice has become more than $4 billion. Further, with the latest capital infusion, Disney now has about a 10% stake in Vice. On the other hand, Vice plans to utilize the new funds for programming and international expansion.
Disney and Vice might seem like a strange collaboration as the former is a family friendly media company, while the latter is a news organization. The primary reason behind this partnership can be the challenges faced by the cable television business. As decline in subscriptions and ratings hold back growth at some of Disney’s older channels, including ESPN, Viceland can compensate for some of the losses.
Last month, Vice and A&E Networks (a joint venture of Disney, Hearst Corp and NBC Universal Inc.) announced that they are joining forces for a new 24-hour channel called Viceland, which is expected to be launched in early 2016. A&E Networks will likely change its H2 network to Viceland and will handle distribution, whereas Vice will choose the shows for the channel and head the marketing. Viceland is anticipated to be available in about 70 million homes and will feature hundreds of hours of completely new programming.
Prime-time shows in Viceland will include Gaycation (with Ellen Page and Ian Daniel); Huang’s World (with Eddie Huang); Noisey (with Zach Goldbaum); Vice World of Sports (with Sal Masekela); Black Market (with Michael K. Williams); Flophouse; Party Legends; and Weediquette (with Krishna Andavolu).
We note that, Disney, which shares space with Time Warner Inc. TWX, has entered into several content distribution agreements with companies like Netflix, Inc. NFLX, Cox Communications and Charter Communications, Inc. CHTR, which strengthen its multi-channel subscription model by increasing the number of platforms.
Now whether Viceland will be able to attract viewers or not is a wait and see story.
Currently, Disney carries a Zacks Rank #3 (Hold).
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