A week after a blistering New York Times report raised questions about whether Ozy, a digital media company aimed at millennials and founded in 2013, was being honest about how many people it reached through its various products, the company announced that it is ceasing operations.
The announcement came on Friday, just five days after the Times report was published and after Ozy CEO Carlos Watson released a lengthy statement insisting the Times report was wildly inaccurate and misleading. He called it a “ridiculous hitjob.” The statement from Ozy’s board was posted online by Times columnist Ben Smith, who wrote the original article calling into question the company’s business practices.
“At Ozy, we have been blessed with a remarkable team of dedicated staff. Many of them are world-class journalists and experienced professionals to whom we owe tremendous gratitude, and who are wonderful colleagues. It is therefore with the heaviest of hearts that we must announce today that we are closing Ozy’s doors,” the statement said.
News: Ozy is shutting down. Here’s the statement from the Ozy board pic.twitter.com/syOUrTtKBD
— Ben Smith (@benyt) October 1, 2021
The Times reported of Ozy’s collapse:
The abrupt collapse riveted media observers not because Ozy had a large number of loyal readers — that, in the end, was the problem — but because many had wondered how the company had managed to survive. The answer had to do with a charismatic and relentless founder, a great story and a slick brand that was perfectly tuned to appeal to noted Silicon Valley investors and powerful advertising executives.
The original Times report began with a story about a conference call between Ozy and Goldman Sachs, which in February was nearly ready to purchase the media company. From Smith:
The scheduled participants included Alex Piper, the head of unscripted programming for YouTube Originals. He was running late and apologized to the Goldman Sachs team, saying he’d had trouble logging onto Zoom, and he suggested that the meeting be moved to a conference call, according to four people who were briefed on the meeting, all of whom spoke on the condition of anonymity to reveal details of a private discussion.
Once everyone had made the switch to an old-fashioned conference call, the guest told the bankers what they had been wanting to hear: that Ozy was a great success on YouTube, racking up significant views and ad dollars, and that Mr. Watson was as good a leader as he seemed to be. As he spoke, however, the man’s voice began to sound strange to the Goldman Sachs team, as though it might have been digitally altered, the four people said.
Someone from Goldman Sachs reached out to Piper through a contact at YouTube. Piper said he had no idea what was going on and had never spoken about the deal. Goldman determined that someone had pretended to be Piper on the call. YouTube’s security team took the impersonation seriously and opened an investigation.
Carlos Watson, Ozy’s chief executive, ended up apologizing and saying that Ozy co-founder and COO Samir Rao had impersonated the YouTube executive. Watson said Rao suffered a mental health crisis and briefly left the company to handle it before returning.
The Times also noted that Ozy’s claims of social reach seem far-fetched, as Comscore shows they reached 2.5 million people at times in 2018 but less than 500,000 a month this summer. By contrast, Ozy claimed in 2019 that it had 50 million monthly unique users. Brian Morrissey, former editor-in-chief of the publication Digiday, said the numbers didn’t make sense, remembering that “never once in my life has a piece of content from Ozy crossed into my world organically.”
Ozy CEO Watson responded to the Times’ “ridiculous hitjob” by insisting its unique users comes from multiple platforms, including its email newsletter subscribers (it claims to have 26 million subscribers across five newsletters, which would mean an average of 5.2 million each), podcasts, TV shows, and its festivals.
Even some of that seems suspect, given Ozy’s inaccurate claims. The company claimed on billboards in Los Angeles that “The Carlos Watson Show” was “Amazon Prime’s First Talk Show,” even though it did not partner with Amazon Prime. The show was uploaded to Amazon Prime using a service, but it is not an Amazon Prime show as most people would understand it. Amazon complained about Ozy’s claims and the company promised to take them down, though Watson maintains the claim is “accurate.”
Ozy’s claims of millions of subscribers and viewers seemed especially suspect since so many people had never heard of the outlet or seen any articles from it. Indeed, when reporting about Ozy’s downfall, The Verge titled its piece: “Ozy Media shuts down just one week after most of us found out it exists.”
The Verge reported that after the initial Times report, more claims from Ozy “started to unravel.” From the outlet:
That includes pretty much any claim about its reach and traffic (a site claiming to have 25 million newsletter subscribers should be more well-known), and its claims to have reported on public figures like Rep. Alexandria Ocasio-Cortez (D-NY) before other outlets. While those claims were echoed in reporting like this article on Axios, Nieman Lab reporter Joshua Benton investigated and found that even in the cases Ozy cited, its coverage came months or years after the subjects had been covered thoroughly in mainstream publications.
Watson also claimed that since the company’s Ozy Fest sounded so much like Ozzfest — the hard rock and heavy metal music festival founded by Ozzy Osbourne and his former wife Sharon — that Sharon invested in Ozy. Sharon Osbourne disputed that claim to CNBC, saying they had never been shareholders, calling Watson “the biggest shyster I have ever seen in my life.”
Further, a former producer for Watson’s show revealed that big-name guests had been told their interviews would appear on A&E, but the network had passed on the show prior to filming. Also, Ozy Media ran an ad in the Times that claimed Dateline referred to Watson as “The best interviewer on TV,” when it was actually Ozy COO Samir Rao who said that while appearing on Dateline.
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