Ozy media closed its doors less than a week after a New York Times column raised questions about the media organisation’s claims of millions of viewers and readers, while also pointing out a potential case of securities fraud.
American digital media platform Ozy will shut down after accusations its leaders had deceived investors and the public about the size of its audience, local news outlets have reported.
A New York Times investigation on Sunday claimed that company executives had intentionally inflated traffic figures and views on other sites including YouTube.
The story triggered cancelled shows, an internal investigation, investor concern and high-level departures at the company.
An emailed statement on Friday from Ozy Media’s board called it a company with many “world-class journalists and experienced professionals to whom we owe tremendous gratitude.” It said it was “with the heaviest of hearts that we must announce today that we are closing Ozy’s doors.”
The board’s statement did not give the reason for shutting down the company based in Mountain View, California. Ozy did not respond to questions about why it was shutting down now or how many employees it had.
Launched in 2013 by former cable news anchor Carlos Watson, the brand secured millions of dollars in investor funding and a number of high-profile partnerships, including the production of an Emmy Award-winning talk show hosted by the Oprah Winfrey Network.
The New York Times report also said cofounder Samir Rao had impersonated a YouTube executive to praise his own platform while in a phone meeting with representatives of Goldman Sachs, who were weighing a $40 million investment in Ozy.
Watson apologised to the bank after the ruse was quickly discovered and the video sharing platform launched a security probe, the report said.
False partnership claims
The investigation also found that Watson had falsely claimed a partnership with Amazon Prime for his eponymous talk show, launched last year, and that he had secured a broadcasting deal for the programme with American cable channel A&E.
Amazon Prime complained to Ozy about use of its branding in billboards promoting the show last week, prompting another apology from Watson, the report said.
In a tweet, Watson claimed 25 million newsletter subscribers, the New York Times, with a much bigger brand presence, says it has 15 million newsletter readers, and more than 30 million views on YouTube. The Times said fewer than 500,000 people went to Ozy’s website in June and July, according to Comscore data.
The discrepancy between the platform’s claimed audience size and its real-world profile prompted ridicule from some publications reporting on the controversy.
“Ozy Media shuts down just one week after most of us found out it exists,” read a headline on the platform’s closure by tech news outlet The Verge.
On Thursday, Marc Lasry, the hedge-fund billionaire and Milwaukee Bucks co-owner who had been named Ozy’s chairman in September, resigned, citing Ozy’s need for someone experienced in crisis management and investigations.
He remained an investor.
A high-profile employee, former BBC anchor Katty Kay, resigned earlier in the week, and an early investor, a venture capital firm, gave up its Ozy shares. The board had reportedly hired a law firm to review Ozy’s business activities.
Cable network A&E pulled a special on mental health hosted by Watson that was scheduled for Monday night, and Watson stepped down from hosting a documentary Emmys awa rds show Wednesday night.
The website Crunchbase, which tracks corporate fund-raising, said Ozy had raised more than $70 million from investors as of late 2019.