Rogers Communications partnering with Vice Media on joint venture

TORONTO – Rogers Communications is teaming with pugnacious cultural magazine and digital outlet Vice Media in a $100-million joint venture that will launch a new TV channel and open a production studio in downtown Toronto.

The partnership between Montreal-created Vice and Canadian media giant Rogers (TSX:RCI.B) will begin next year with the Vice TV Network in Canada and a digital distribution model that will let Rogers chase the 18- to 34-year-old demographic with exclusive mobile content.

The move comes as Rogers scours the market to secure new content agreements and relationships for brands that appeal to young Canadians, who consume an increasing amount of its content online.

Vice, which began as a politics and culture magazine, is one of very few brands that has built its name on appealing to younger adult viewers and providing intimate angles on international news stories.

The announcement was described as a way for Vice to build its global presence while training young journalists and filmmakers.

Rogers will provide the financial backing over a three-year commitment dedicated to building out the foundation of the operations.

“You can view it as research and development, if you like,” Rogers chief executive Guy Laurence said in an interview.

The money will go towards establishing the studio location, which hasn’t been selected yet, and installing technology required for the digital distribution model, he added.

Like its unconventional roots, Vice’s studio will stray from the traditional operations of a media broadcast facility, said Vice Media founder Shane Smith.

“We call it a studio, but it’s not like sound stages and green screens,” he said. “It’s sort of state of the art. You can plug in anywhere, everything is naturally lit so you can shoot any time.”

“Studios are always slick with graphics and things and camera angles,” he added.

“The way we look at it is we want to deconstruct that experience to show you how we pick the story, how we edit the story and what wasn’t put in the story. We want to show you the whole process, warts and all.”

Vice will oversee creation of the programming while Rogers intends to largely play the role of a content distributor in Canada. Some of the content will be created for Vice’s TV network and its international digital platforms though Laurence said it was “too complex” to explain the divide.

About 150 people will be hired for various production, on-camera and technical jobs.

Rogers will also hold the rights to exclusive mobile content that it will distribute to subscribers through daily updates to Rogers and Fido customers.

Vice Media has been aggressive in experimenting with different ways to distribute news content. The company operates a YouTube channel, which has more than five million subscribers, and a weekly series on U.S. cable channel HBO.

Earlier this month, Vice announced plans to open newsrooms in seven countries as part of launching local-language editions of its YouTube channel. The company said it would focus on markets in Germany, France, Italy, Spain, Australia, Brazil and Mexico after receiving $500 million in funding from A&E Networks and venture capital investor Technology Crossover Ventures.

Rogers has been looking outside traditional broadcast venues for ways to keep pace with rapidly changing viewership tastes.

Last year, the telecommunications company paid $5.2 billion for the multiplatform Canadian rights to National Hockey League games for 12 years, which it has promoted to consumers as a multi-screen experience they can watch on their TVs and smartphones.

Rogers has also partnered with Shaw Communications (TSX:SJR.B) for a streaming video service that will directly compete with Netflix as a way to watch movies and TV series.

While the studio location hasn’t been disclosed, Laurence said the new facility isn’t part of any effort to merge its existing facilities into one space.

“This is totally different kind of studio to the one you’d see at SportsNet,” Laurence said, citing an example of the other production facilities operated by Rogers in the Toronto area.

Rogers also owns the Citytv building at Yonge and Dundas Square and is renting space at the CBC headquarters to house its Hockey Night in Canada set.

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