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Vice magazine gets cash injection for growth

L-R Shane Smith (Vice Founder), Suroosh Alvi (Vice Founder), and Eddy Moretti (Executive Creative Director of Vice) at the Vice Holiday Party 2010

Bryan Derballa/Bryan Derballa

It has been called the Hipster Bible. Now, thanks to a large influx of cash, more of the world will hear the gospel of Vice magazine.

The magazine, which started in 1994 as a free black-and-white publication called the "Voice of Montreal," has grown into Vice Media Inc., with magazine editions in 27 countries and offices in 34, divisions in TV and online, a record label and a marketing agency.

On Tuesday, three large media players reportedly invested a high eight-figure amount in the empire - money that one of its founders said will be used to expand into the emerging markets of India and China.

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Vice's new investment partners are MTV creator Tom Freston, U.K.-based media conglomerate WPP, and Raine Group, a boutique private equity firm focused on media.

"Because we were on the periphery for so long, Vice has developed a unique style and a unique culture," Shane Smith, co-founder of Vice, said in an interview Tuesday.

While Vice has amassed a cult following for a relentlessly sarcastic tone and a devotion to underground culture, it has also operated as a savvy marketing engine.

"WPP is investing in Vice to further develop our content capabilities, particularly in new media and amongst the youth consumer segments," the company's chief executive officer, Sir Martin Sorrell, said in a statement Tuesday. "Vice has been extremely successful in developing and repositioning major brands in these areas."

The magazine counts BMW and Nike among its advertisers. Vice's irreverent, potty-mouthed aesthetic has proven valuable for brands, Mr. Smith said.

"We have a hyper-urban audience. ... They're a very sought-after demo."

Vice has expanded beyond printed content as well. In addition to its music and film businesses, it has created shows for MTV and produces news and other videos for the Web that led to a content-sharing deal with CNN over the past year. Its online video site, VBS.TV, counts Being John Malkovich director Spike Jonze as a partner.

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Digital media will continue to be Vice's focus as it expands, Mr. Smith said. It will soon launch new websites devoted to sports, news, independent film and photography. VBS will be integrated with other Vice content on the new, which will also launch soon. In China, gargantuan Web portals and have already expressed interest in partnerships.

And India, where more people are consuming content on mobile phones, could be a vital testing ground for the brand. Vice does not really have a presence on mobile devices; what the company learns in India will be used to launch Vice on smart phones and tablets in North America and in the rest of the world, Mr. Smith said.

The company also announced on Tuesday that William Morris Endeavor Entertainment, under the leadership of talent agent and CEO Ari Emanuel, will now represent Vice. William Morris has a minority stake in Raine, one of the new investors in Vice.

While it still keeps an office in Montreal, the company's roots are now in the hipster hot spot of Williamsburg, in Brooklyn. Vice's challenge now will be to keep the edgy image it has cultivated while accumulating capital and expanding the business. But Mr. Smith shrugs off those concerns. Every time Vice has expanded, he said - whether to Ottawa at first, or places such as Poland much later - there have been critics saying they had sold out or it was the end of the brand.

"Cool, by definition, is small," he said. "But for us, we don't necessarily care about being cool."

Editor's note: The amount of money invested in Vice Media Inc. has not been disclosed, but is in the tens of millions of dollars. An incorrect figure appeared in an earlier version of this online article. This version has been corrected.

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