The colossal wreck of Ozy

A week ago yesterday, Ben Smith, the media columnist at the New York Times, reported details of a conference call in February during which Alex Piper, a top staffer at YouTube, told representatives of Goldman Sachs who were preparing to invest in Ozy, a digital media company, that Ozy’s videos were performing well on the platform, suggesting that an investment would be a sound bet. In reality, Smith wrote, it wasn’t Piper who was speaking to the investors but rather Samir Rao, a Goldman alum who co-founded Ozy and now served as its chief operating officer; Google, which owns YouTube, found out about the impersonation, and notified the FBI. Smith’s article went beyond the eye-popping anecdote to raise broader doubts as to the veracity of Ozy’s claims about the size of its audience, noting that “even in an industry known for smoke and mirrors,” the company “has for years raised eyebrows”; in 2017, for example, Craig Silverman reported for BuzzFeed News, where Smith was then the editor in chief, that Ozy was one of a number of publishers to have paid for automated “traffic” to sate advertisers. Smith’s story raised eyebrows afresh on media Twitter and triggered an astonishing implosion at Ozy, as one damning claim about its practices cascaded after another. On Friday, it shut down.

After the initial story came out, Carlos Watson, a Goldman and MSNBC alum who was also a founder of Ozy and became its public face and CEO, assailed the article as a “ridiculous hitjob”—claiming that Rao impersonated Piper as the result of a mental-health crisis, and sharing a statement in which Marc Lasry, a hedge fund manager and co-owner of the Milwaukee Bucks basketball team who chaired Ozy’s board, praised Watson for his “compassion” in dealing with the incident and offered his full support. Watson also alleged that Smith once tried to broker a deal for BuzzFeed to acquire Ozy, and thus had a conflict of interest. (Smith described himself as “peripherally involved” in the talks.) Ozy, Watson added, was “strong and undeterred.” But the company quickly started to buckle. Journalists including Johan Moreno, a Forbes contributor, reported that Ozy ran ad campaigns quoting praise for Watson from major news organizations (the LA Times: “Anderson Cooper meets Oprah”; Deadline: “the best interviewer on TV”) even though the quotes—when they actually existed at all—came from interviews with Ozy executives or sponsored content.

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On Tuesday, officials in Miami confirmed to the Daily Beast that a local edition of Ozy Fest, Ozy’s events brand, had been canceled, and Watson stepped back as host of the Documentary Emmy Awards, saying he didn’t want to be a distraction; the same day, a key investor stepped away and the board U-turned on Lasry’s initial supportive statement, commissioning an outside law firm to investigate Ozy’s practices and asking Rao to go on leave. On Wednesday, Katty Kay, a veteran BBC journalist who recently left the broadcaster to join Ozy, resigned, saying that Smith’s story had taken her by surprise. On Thursday, Lasry resigned as chair of the board, citing his lack of experience in “crisis management”; meanwhile, Smith reported that Ozy lured staffers to work on a show hosted by Watson with the promise that it would air on A&E (it didn’t), the Wall Street Journal reported that major advertisers had paused their campaigns with Ozy, and CNBC reported that despite Watson’s claims to the contrary, Ozzy and Sharon Osbourne—who once sued over Ozy Fest’s similarity to their “Ozzfest” music-festival brand—never invested in the company. (“This guy is the biggest shyster I have ever seen in my life,” Sharon said.) On Friday, Watson resigned from NPR’s board hours before it was set to convene to discuss his presence on it. Even after Ozy’s closure announcement, the sharp scrutiny continued. Over the weekend, Sara Fischer reported, for Axios, that Ozy exaggerated or paid to boost a host of performance metrics, from the reach of its email list to physical attendance at Ozy Fest events.

As all this was going on, Ozy found itself submerged in a tide of Twitter condemnation and ridicule. Media types shared their personal Ozy horror stories; Susie Banikarim, who once met with Watson about a possible job there, said that “nothing he said made any sense,” including his reference to Ozy as the “‘Uber’ of media.” Others noted the irony of the company borrowing its name from “Ozymandias,” a poem by Percy Bysshe Shelley that, in Ozy’s own words, “is commonly read as a warning against outsized egos and the impermanence of power” (“we choose to read it differently”), while many observers remarked that they had either never heard of Ozy or seen any of its journalism shared by a real human—a narrative that elicited some pushback from real journalists who worked at Ozy and insisted that their work there was meaningful. As the week went on, the voices of staffers were further amplified as CNN, Bloomberg, Insider, and other outlets reported allegations that Ozy fostered an abusive workplace culture where employees were pressured to work through exhaustion, anxiety, and even COVID diagnoses; numerous staffers likened the company to a “cult,” with Watson as its charismatic leader. Around seventy-five people worked at Ozy at the time it shut down. They’re now out of a job. Following the closure announcement, Fischer said that she’d spoken to many of them, and “they’re reading all of the stories & tweets. This is very hard for them.” Fischer added that “it’s unfair to say Ozy was a ‘sham.’ The correct framing is that it was woefully mismanaged.”

The allegations against Ozy have been exceptionally damning and weird. But there are broader lessons to be taken from its collapse, and many of them reveal that it wasn’t much of an exception at all. As Fischer and others have suggested, the fall of Ozy is a labor story in an industry where unacceptable workplace conditions are all too common; Lauren Williams of Capital B, a recently-founded site focused on serving Black audiences, pointed out, meanwhile, that Ozy’s financial success is a testament to the fact that “some advertisers and venture capitalists are much more comfortable attaching themselves to media with lower stakes that is attached to lofty ideas, but not news that’s going to move the needle or challenge the status quo.” Silverman, of BuzzFeed, expressed concern that “other people of color building media businesses are going to face even more scrutiny and skepticism because of Ozy‘s deceptions” (Watson is Black); Silverman also called Ozy “a perfect, cautionary illustration of Paid versus Earned media,” noting that Ozy spent money to juice traffic but was never able to build a sustainable audience that actually wanted to view its content. In a follow-up column published yesterday, Smith convincingly made the case that the most interesting part of the Ozy story doesn’t concern Watson, but rather the advertisers and investors who believed the hype and continued to plow money into the company—a reflection of the broader truth that business elites all too often cluster around seductive narratives without doing sufficient due diligence.

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Smith notes this dynamic is far from unique to the media industry; indeed, he told CNN’s Brian Stelter yesterday that he’d be wary of extrapolating broader lessons for digital media from Ozy’s case, given the apparent scale of its deceptions. Throughout his reporting, Smith has explored parallels between Ozy and Theranos, the infamous blood-testing startup whose founder, Elizabeth Holmes, is currently on trial for making fraudulent claims about her products. “Unlike Theranos,” he wrote in his first story last weekend, “nobody is drawing literal blood in the media business,” so “high-profile investors may not be expected to do all that much homework.”

That’s true. But there are media-specific stakes here that are high in their own way; a thriving press is the lifeblood of democracy. Ozy speaks less to an industry culture of conference-call impersonations and spats with the Osbournes than one in which powerful people throw money at shiny objects with buzzy PR; meanwhile, local newspapers with proven records of accountability journalism are dying. If radical ideas that involve, say, using public money to save journalism have long been considered to be taboo by many in the US, the glaringly poor incentives of private media investment have usually been explained away as a function of individual bad apples; Ozy is, at root, little more than a particularly stark example of that trend. As Ozy has blown up, many observers have had fun with the text of “Ozymandias”—and the metaphor invited by the “colossal Wreck” of a great king’s crumbling statue is, to be fair, irresistible. But the ground beneath the statue is crumbling, too.

Below, more on Ozy:

  • Before they were cool: Over the years, Ozy often claimed that it discovered now-famous people—Alexandria Ocasio-Cortez, Trevor Noah, Brett Kavanaugh, and so on—before the mainstream media caught onto them, but Nieman Lab’s Joshua Benton writes that such claims have often been ludicrous; outlets including Mother Jones, the Journal, and Mic, for example, all ran stories about Ocasio-Cortez before Ozy did. “If Ozy’s audience numbers are sketchy, what it has to fall back on is its journalism,” Benton writes. “And, to a rough approximation, no one reads their journalism. So they base their claims to journalistic excellence around the idea that they find these future stars before everybody else. And, from everything I can tell, there’s very little to support that.”
  • Silence: Maxwell Tani and Lachlan Cartwright, of the Daily Beast, addressed a question posed by Ozy’s rapid demise: “How did the company, which launched in 2013, avoid serious scrutiny for so long?” The answer, they write, has something to do with Watson’s “efforts to stifle dissent both internally and externally.” Current and former Ozy staffers told Tani and Cartwright that they were required to sign stringent non-disclosure agreements (an unusual demand for a news organization), and that Watson tried to pressure other outlets into dropping negative stories about Ozy’s workplace culture.
  • Investors: Investors in other media companies were among those to put money into Ozy—Laurene Powell Jobs, whose Emerson Collective has a majority stake in The Atlantic, knew Watson personally and was an early backer of Ozy; Axel Springer, the German media conglomerate that owns Insider and Politico, bought in, too. In response to Smith’s initial reporting, Emerson distanced itself from Ozy, claiming that it “did not participate in Ozy’s latest investment round and has not served on its board since 2019.” In recent years, CJR has gone deep on both Emerson and Axel Springer; you can find our stories, by Robert P. Baird and Andrew Curry, respectively, here and here.
  • A hot new trend: When Smith joined Stelter on CNN yesterday, he was wearing a sweatband on his head—a tribute to Jeff Horwitz, a Wall Street Journal reporter who had worn one while discussing his reporting about Facebook on Meet the Press earlier in the day. “When I woke up at 4am Pacific, I was motivated by two desires: to contribute to productive discourse about a world-altering technology company and to wear a sport-coat accessorized sweatband on national television,” Horwitz tweeted. “I am 100% confident I accomplished the latter.” Smith, for his part, removed his after one question.


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Jon Allsop is a freelance journalist whose work has appeared in the New York Review of Books, Foreign Policy, and The Nation, among other outlets. He writes CJR’s newsletter The Media Today. Find him on Twitter @Jon_Allsop.

TOP IMAGE: Carlos Watson, right, speaks onstage with guests during Ozy Fest 2018. Photo by Joe Russo/Sipa USA via AP Images