Baggot Inn billionaire warns of media bloodbath
From pulling pints in Dublin to Vice Media, media mogul Shane Smith predicts wave of consolidation in global media over the next year
Shane Smith used to pull a good pint. Back in the late 1980s and early 1990s when the Baggot Inn was a place, when Full Circle blasted out golden oldies every Saturday night and when David Bowie and his Tin Machine once made a surprise guest appearance, Smith was an effervescent young barman.
A cheery young chap, he dispensed pints with a smile that only a Canadian could get away with, on a street that was more renowned for its choice of hostelries than for its friendly barmen.
Although the 19-year-old Smith only worked in the Baggot Inn for a year, he would have been familiar with - and probably intrigued by - a motley crew of senior media, marketing and advertising folk who would meet there on daily basis for a few lunchtime drinks, before decamping (and possibly decanting) to one of several nearby restaurants where the proprietor would rub his hands with glee as his regulars walked, and occasionally staggered, through the door.
By all accounts, the lunches were good fun and the bon viveurs were all men (what do you expect in those days?) of integrity, generosity and charm, with the occasional bit of mischievousness thrown in for good measure.
But everything started in the Baggot Inn and you could almost set your watch by them as they shuffled through the door every day at 12.45pm and sat at the window to discuss everything - from sports to politics, and occasionally business.
Sometimes deals were done, but more often than not the lunchtime sessions were an escape, or an excuse, to get away from the many issues that were beginning to raise their ugly heads in the world of media - issues like rising print and production costs, the globalisation of advertising services, declining circulations and of course the imminent impact of the internet which, in 1992, made its debut in Irish homes and businesses. Uncomfortable decisions were parked, inconvenient truths obfuscated.
Occasionally, it felt like some of the characters - though not all of them - were plucked from a fin de siecle novel where they valiantly clung to a simple but profitable past, yet fearful of the uncertain and disruptive future that stretched out before them. They were, in many ways, like the last days of the Irish Raj and this fear of the unknown had induced a sense of paralysis in all who stood in its way.
The Baggot Inn, of course, has since disappeared into a chapter on Irish musical folklore while the motley crew of lunch-time revellers has long gone and several of them have passed away, taking their once profitable businesses with them.
The plucky Shane Smith, meanwhile, took the road less travelled to his native Canada where in 1994 he, along with some friends, set up a magazine called The Voice of Montreal. The magazine later changed its name to Vice and Smith and his partners relocated to Brooklyn several years later. The rest is history.
Smith's publishing empire now extends across several continents, numerous print, online and broadcast media brands while his personal wealth is estimated to be in the order of €1.5bn. Vice Media moved into areas where many feared to tread by serving up alternative news and views to a demographic that felt disenfranchised by the established media outlets in the US and Canada. Of course, most people thought he was bonkers.
While he has an uncanny ability of getting up the noses of the media establishment for his forthright and often uncompromising views on the media and advertising industry (as he did at the recent Edinburgh TV Festival two weeks ago), it's hard not to admire the success and determination he has displayed since he pulled his last pint in the Baggot Inn all those years ago.
But some of his views about the media and advertising industry being slow to respond to changing demographics and media consumption habits and that outdated business models in both media and advertising are entirely valid.
During the annual MacTaggart Lecture, which he delivered this year, he predicted a bloodbath in the media sector over the next year as companies scramble to acquire or be acquired. While he was specifically referring to the likes of Time Warner, Netflix, Apple and quite possibly his own company Vice Media (which already has a number of possible suitors hovering over it), the wider media industry should also take note.
A lot of the business models that have worked, or at the very least functioned, in the past are simply not sustainable in the future. Whether these companies survive by being acquired or by doing the acquiring themselves - or for that matter merging - remains to be seen. The alternatives to consolidation are too depressing to think about.
In fact, I would gladly bet all the tips that I gave Shane Smith after every round - multiplied a thousand times over - that clinging to the past and being paralysed by the fear of the unknown are not an option.
Sunday Indo Business