Ozy Media Saga Underscores Opaque Nature Of Digital Media

Ozy Media is back, at least for the moment, but its sudden flameout says something important about the fractured, often ephemeral nature of digital-media companies.

The 8-year-old company shut down on Friday following reports of inflated traffic and a case of possible securities fraud.

Founded in 2013 by two Harvard and Goldman Sachs alumni, Carlos Watson and Samir Rao, the company attracted funding from a variety of high-profile investors with its blend of newsletters, podcasts, YouTube programming, and offline events, all of which featured content that the New York Times describes as earnest, inclusive and policy-focused.

There were past questions about Ozy Media’s traffic claims — and those of other digital-media sites. But the Times kick-started therecent Ozy Media coverage on September 26 with a report about charmed investors and shady, inflated traffic numbers.



It’s a safe bet that few people had even heard of Ozy Media before the series of bombshell media reports that began last week and continued unabated over the weekend. In media-on-media circles and beyond, the story became a viral sensation. And then the shutdown on Friday appeared to be the end of it, except that Watson, the highest-profile face of the company, did a series of appearances on Monday morning, defending the company and claiming a “Lazarus moment.”

Investors, of course, are responsible for their own decisions and sometimes falter with due diligence when they fall for the newest shiny object. But the Ozy saga is just the latest example of a persistent problem in digital media: The opaque nature of audience development and measurement.

The system allows for all kinds of abuses — buying traffic, inflating numbers with low-quality traffic, failing to unsubscribe people from newsletters, buying social-media interactions, and for a lot of companies, no effective third-party verification.

Axios noted on Saturday: “The story of Ozy became so viral so fast because it highlighted the worst parts of every industry in America: Naive investors throwing money at poorly run companies, digital media outlets faking their numbers and over-zealous startup founders toeing the line between dishonesty and delusion.”

After Monday’s announcement of the relaunch of Ozy Media, Axios added: “OZY is over. Even if Watson doesn't know it yet.”

1 comment about "Ozy Media Saga Underscores Opaque Nature Of Digital Media".
Check to receive email when comments are posted.
  1. Darrin Stephens from McMann & Tate, October 6, 2021 at 10:01 a.m.

    Not the first time it's happened, but why did the press discover the fraud and not the ad buying industry?

Next story loading loading..