When Vice Media founder Shane Smith launched pay TV channel Viceland in 2016, he told the world that he was going to teach stodgy, old content companies how to succeed in the new media space.

“Twelve months from now, we’ll be on the cover of Time magazine as the guys who brought millennials back to TV,” Smith told The Hollywood Reporter in February 2016, just days before it launched Viceland.

A year later, it looks like the brash media mogul is the one getting schooled. For starters, despite all of Smith’s chest-thumping, Viceland is struggling with low ratings — lower than documentaries on H2, the channel it replaced — after missing revenue targets by a wide margin last year.

The company is scrambling to deal with a string of sexual harassment allegations, which arose amid a testosterone-fueled culture, that rocked its executive suite after a blistering expose in The New York Times a few months ago. And hanging over the company since 2016 are reports that even the digital growth isn’t what it’s cracked up to be, as more than half of Vice.com’s web traffic was from partner sites, a common-but-frowned-upon practice.

And there has been no shortage of drama in the C-suite: Vice Media suspended former co-president Andrew Creighton and fired chief digital officer Mike Germano, both named in the Times article, after the story broke. Smith, a swaggering CEO who peppers his conversations with F-bombs and bravado, will step down from that role to focus on strategy as executive chair.

Vice Media contends it is a company in transition, and observers point to a two-year-old quote from Smith where he said he would eventually hire a CEO so he could focus on deals and strategy. To them, he’s is making good on a promise. But there is no question Vice executives are finding the TV business a lot harder than they initially thought.

And some believe major investors, including A+E Networks, The Walt Disney Co. and private-equity firm TPG, are now concerned that the heady $5.7 billion valuation — nearly twice the market capitalization of AMC Networks, home of The Walking Dead — is suddenly starting to feel tentative and inflated, and want to avoid a freefall.

Thus, an old-school cable veteran, and a woman, has been named to lead the charge. A+E Networks CEO Nancy Dubuc, whose employment deal with the programmer was scheduled to expire at the end of the year, agreed March 13 to become Vice Media CEO.

Veteran Presence Steps In
Dubuc was a candidate for the top spot at Amazon Studios, a position that was formerly held by Roy Price, who was fired after several sexual harassment allegations came to light. That job went to NBC Entertainment president Jennifer Salke last month.

Despite its edgy programming (F*ck, That’s Delicious!) and anti-authoritarian bent, Vice is really chasing a universal goal in the TV business — reach a broader audience with fresh programming at a time when traditional TV ratings are down across the board and cable operators are losing subscribers.

Related: Cord-Cutters Not Returning to Pay TV, TiVo Study Finds

Dubuc’s appointment, at first glance, appears to solve many of Vice’s immediate ills. As a board member, she is well-versed in the inner workings of the company. As an executive who has championed diversity in the workplace and in society over the years, she gives the company immediate credibility and will have a zero-tolerance attitude toward harassment.

Dubuc is also a seasoned TV executive schooled in navigating the fickle environment of media and has a proven track record. She joined A+E Networks in 1999 as director of historical programming for The History Channel and steadily moved up the ranks, becoming A+E’s CEO in 2013.

On her watch, A+E has added scripted and reality programming hits, expanded its digital content reach and created A+E Ventures to invest in early-stage technology and content companies.

It was Dubuc who spearheaded A+E’s $250 million investment in Vice Media, leading to the creation of Viceland, formerly History International (H2). Dubuc brings a proven TV business acumen to her new role, but also sends a signal that the old days are over.

“I believe they have people who have been involved running networks,” Pivotal Research Group senior research analyst–advertising Brian Wieser said. “I think the problem was they needed a change at the top.”

Smith started Vice as a punk-rock fanzine in Montreal in the 1990s, growing it into a print, digital and video content behemoth with about 3,000 employees just two decades later. Vice Media also has a popular daily news show on HBO, Vice News.

From ’Zine to Empire
Besides the publishing business — it still cranks out magazines, as well as popular online news and culture websites — Vice Media has spread its tentacles into music with in-house record label Vice Music; digital and mobile advertising through Virtue Worldwide; and television and feature film production via Vice Films.

An aging rocker who two years ago bragged about dropping $300,000 while with friends at the Bellagio in Las Vegas, Smith has toned down his shtick considerably since his early days. He got married to a former Vice employee in 2009, had kids, bought a 14,000-square-foot, 12-bedroom mansion in Santa Monica, Calif., and apologized publicly for the company’s past “boys club” atmosphere.

But with women’s rights in the workplace finally gaining traction in the media business in the wake of the collapse of The Weinstein Co. and the downfall of media mogul Harvey Weinstein and others, the time was ripe for a regime change.

Still, in a statement announcing Dubuc’s appointment, the ever-brash Smith didn’t disappoint fans of his irreverent style. “We are a modern day Bonnie and Clyde, and we are going to take all your money,” he said of Dubuc and himself.

Then he quickly shifted to mimic the stodgy media executives he so gleefully ridiculed in the early days of Vice’s ascendance as the arbiter of millennial taste in news and entertainment. “As we go forward, Vice needs a best-in-class management team to harness all of this growth and control our destiny, whether it be staying independent, strategically partnering with someone or going public,” Smith said.

It’s possible more old-school media types are destined for the Vice payroll, and perhaps the company is tidying up for a sale or an initial public offering. But while IPOs and selling the company were both considered to be strong options just a few years ago — Disney was long speculated to be a buyer and talk of a public offering is always a hot topic — that has cooled considerably.

Disney appears to have its hands full at the moment with its pending $66.1 billion purchase of 21st Century Fox assets. And Viceland’s struggles have caused some to believe an IPO is on hold for at least this year.

“I can’t imagine how they possibly could anytime soon,” Wieser said of a sale or an IPO, adding that the cultural issues are likely the top priority.

That’s a big departure from less than a year ago, when private-equity player TPG Capital made a $450 million investment for an 8% stake in Vice, pushing its valuation to $5.7 billion.

At that current level, Vice Media is worth nearly twice as much AMC Networks (with a market cap of $3.1 billion), home of the most-watched show on ad-supported pay TV, The Walking Dead. And its market cap is more than three times higher than the next millennial-focused digital darling, BuzzFeed, valued at about $1.7 billion.

But in a short time, Vice has slipped from new media standard-bearer to a company struggling to hold its place in the ever-shifting content sands. Vice missed its 2017 revenue target by $100 million, due mostly to Viceland, and is being pressured by its investors to turn a profit in 2018, according to a February report in The Wall Street Journal.

People familiar with the channel have countered that it is extremely rare for a two-year-old network to turn a profit, adding that while Viceland fell short of revenue targets, the shortfall was a fraction of the Journal’s $100 million estimate. They said overall revenue at Vice Media was up by double-digit percentages in 2017 and that comparing Viceland, which is available in about 70 million homes, to fully distributed networks is unfair. A better comparison is with networks such as ESPNU, SundanceTV or Cooking Channel, all of which had lower ratings than Viceland, they added.

Still, according to industry researcher Kagan, a unit of S&P Global, Viceland gets about 6 cents per subscriber per month in affiliate fees, about the same as it did when it was A+E’s H2 channel. But even with a younger audience, the channel has fallen short in terms of advertising.

Kagan estimated that net advertising revenue at the channel plunged from $60.9 million at the end of 2015, when it was still H2, to $32.4 million at the end of 2016. That figure was more than halved to $14.3 million in 2017 as low ratings decimated sales; it should rise slightly to $18.1 million in 2018.

Kagan analyst Derek Baine estimates Viceland posted negative cash flow of $16 million for 2017 and will post a similar number for 2018. By comparison, H2 generated $9 million in positive cash flow in 2016 for A+E Networks.

“Viceland is not doing very well,” Baine said.

Viceland counters that although it delivers only 60% of the primetime impressions that H2 did in its target demo of adults 18 to 49 (2017 vs. 2015), it has improved its appeal with attractive advertising targets. Viceland’s audience has higher income, more education and is younger and more multicultural than H2 viewers were.

For ad buyers, Viceland has been a mixed bag.

“Generally speaking, they’ve skewed more male and younger than general TV, so it’s a success in that regard,” Horizon Media co-chief investment officer David Campanelli said. “But while the skew is generally on target, the ratings are lower than most have hoped.”

With Viceland’s ad load, clients are encouraged to use more branded content to reach consumers, similar to how Vice uses branded content online. “We have done some good branded content with them,” Campanelli said. “They have great production capabilities in-house, so it is very turnkey.”

The average age of a Viceland viewer is around 40 years old — compared with 57 for H2 — but that skews even younger for premiere airings of original shows and for different platforms. In some cases, the average age falls to the mid 30s or high 20s.

Viceland has been growing and adding sponsors, A+E Networks executive vice president for advertising Peter Olsen said. “I think the acceptance of the network is growing,” he said. “Our advertising is up, with 180 clients on board now, which is good.”

Viceland is one of the cable networks with the fewest ads, Olsen noted, at just eight minutes per hour — about half the amount of other channels. That low commercial load keeps viewers engaged.

“It’s the best network of all for retention through breaks, engagement through breaks,” he said, citing network research. “That’s pretty encouraging.”

Playing a Long Game
“For a network in 70 million homes, they’re doing decent ratings numbers, the revenue stream is predictable, and they’ve increased the client base,” said one person familiar with the company who asked not to be named. “It’s a long game and they’re still only two years in.”

According to media reports, Viceland drew an average primetime rating of 0.1 from Sept. 25 through Feb. 4, or about 106,000 viewers. That’s up about 10.4% from last year and in line with such networks as Smithsonian Channel, Azteca America and GAC.

It’s not uncommon for new networks to take some time to find their footing. Ratings for OWN: The Oprah Winfrey Network were dismal early on compared with Discovery Health, which it replaced in 2011.

Wieser said he can’t think of any network that became a hit from the start. And in today’s climate, with distributors and programmers looking to reduce the number of channels they offer, it’s even more unlikely.

Viceland’s attraction is its mixture of shows with edgier titles like F*ck That’s Delicious (chronicling the gastronomic adventures of rapper Action Bronson) and Slutever (where sex writer Karley Sciortino explores female sexuality), to sponsored shows like Beerland (bankrolled by Anheuser-Busch InBev and featuring Meg Gill, founder of its craft beer brand Golden Road Brewing, as she travels the country meeting home brewers) to shows in off-network syndication like It’s Always Sunny in Philadelphia.

Vice also has managed to attract a few Emmy nominations for Gaycation, a documentary highlighting LGBTQ cultures around the world, hosted by actor Ellen Page and producer Ian Daniel, and for the Gloria Steinem-hosted Woman.

But to attract ratings, the network may have to fall back on a tried and true TV tenet: More money equals more quality content.

Viceland is spending about the same on programming as its H2 predecessor did, according to Kagan — $72.4 million on original and acquired programming in 2016, versus $69.4 million for H2 in 2015. Kagan also estimated that programming spend will grow to $83 million by the end of 2018.

Wieser said Viceland’s success or failure may finally rely on how much of a commitment Vice Media is willing to make to programming. And that will depend on how much it is able to fund the business.

Vice has already raised more than $1 billion from investors like Disney, A+E Networks, TPG Capital and 21st Century Fox. Now that it is unlikely to be raising more capital in the near term, it is forced to show investors it can fund the business on its own.

Dubuc has had experience turning networks around. When she took the helm of History in 2007, she took what was then a documentary-heavy network and spiced it up with reality programming such as Ice Road Truckers, Ax Men, Swamp People and Pawn Stars, vaulting it from No. 11 among viewers aged 25-54 to No. 4. At A&E, Dubuc launched Duck Dynasty, which outpaced Fox’s American Idol in its heyday, and brought scripted hits like Bates Motel to the lineup. Viceland and its investors are hoping she can keep that streak intact.

“If you’re Vice and you invested $100 million in programming, you would get some viewership but not a lot,” Wieser said. “If you spend $1 billion to support Viceland, you’d have a business. It might lose money, but it would be a business.”