We are in the second week of big news surrounding the media outlet Ozy. After a whirlwind of controversy, last week saw a remarkably rapid collapse of the media brand. Top office controversies led to investors pulling out, reporters and other content providers quitting, advertisers suspending agreements, and executives resigning amid the growing scandal, until this past Friday, when the formal announcement was made the company would be shuttering completely.
For many people, the name Ozy was unknown, and this was both the problem and the explanation of what was happening. The failure of the company was a sudden development, springing out of a New York Times report on September 26, but as much as the "why" behind the company failing is intriguing, just as important is the "how," given this was a media company that was able to operate subversively without a tremendous amount of media blowback. Ozy came into form in 2013, and even while some called their questionable claims "an open secret," along with numerous employees supposedly posing questions about their operations, the company was able to exist for years until the Times report last weekend.
How can this be when not only is this a media company trying to exist in the media landscape but one with notable claims that the same media should have been able to verify? Part of the reason is that the force behind the company was one of their own. The CEO was Carlos Watson, who came out of the investment sector to become a contributor at CNN, was an anchor at MSNBC, and until last week, was on the board of National Public Radio. Watson had his own interview show, worked with Oprah, and was a regular presence across the journalism environment promoting his Ozy brand.
In many ways, the Ozy story is a contemporary, familiar one. There are a number of now-infamous failings of this type, from WeWork to Theranos or the movers behind the Fyre Festival. We see a startup that blazes onto the scene and appears to be a flourishing entity that makes investors salivate but ends up becoming little more than just appearances. The "fake it 'til you make it" model is becoming all too common in the digital venture capital scene, and by all evidence, this applied to Ozy.
Many in the journalism field were familiar with the Ozy brand; there just was not much familiarity with its product. Despite boasting large traffic and audiences, one thing that was common was that Ozy's product was seemingly in short supply. You did not see Ozy stories cycling through your news feed. The site was not breaking stories, and you did not see them landing much in the cultural fields. And despite placement in numerous categories, there was little in the way of buzz or interest in what they were doing. If you heard anything of note, it was Watson and the company insisting how influential they were.
The instantaneous house of cards style collapse was triggered by the New York Times' report of a fraudulent investment scheme. It was in February when a proposed $40 million investment deal was to be discussed. A Zoom meeting was arranged between Ozy executives, Goldman Sachs (where Watson had once worked before his media career) and the head of YouTube programming. Tech issues supposedly foiled the video meeting, and they had to resort to a traditional conference phone call. It was later, after the call, when Goldman Sachs independently reached out to the YouTube executive, only to learn he was completely oblivious to the meeting. Someone at Ozy had posed as the figure.
This revelation triggered an outpouring of other information that revealed this was a common practice throughout Ozy's existence. At an initial glance, the company looked to be everything they touted from their inception. Designed to be a new-style media company aimed at the millennial audience, there were various incarnations of the Ozy brand. The news site was just the start, as there was a YouTune Channel, podcasts, numerous newsletters, a PBS talk show, specials on Oprah Winfrey's cable network, and even a live Ozy entertainment festival.
But what this all amounted to was that Ozy was a brand, but they were little more than that. Over time, it became apparent that while touting much web traffic for certain entries, it was probable that the alleged interest was fabricated. Many were noting that on their web videos, for instance, though they might display a large number of viewers, the comments were minuscule. Likewise, many of the social media accounts sported a large audience, but Ozy postings would barely show any engagement. Johan Morena at Forbes gives an example.
Also Ozy's IG account has 655K followers -- their latest post, shared 12 hours ago, has 22 likes and zero comments. 655K followers guys lol pic.twitter.com/3GzCewaaEc
— Johan Moreno (@dudejohan) September 27, 2021
The suggestion that Ozy had been purchasing their audience to show inflated numbers for investors and advertisers has been made for years. In December 2017, BuzzFeed detailed how they found Ozy generated web traffic through a manufactured process using a third-party. That company would fabricate web visits using a pop-behind process, where a hidden window would appear behind a user's browser window and from that, a software would send repeated visits to a target site, inflating impressions.
BuzzFeed found that over a span of months, eight of the top-10 most visited Ozy pages were fed by this process and used to target advertiser-sponsored pages. The company used a practice of first funneling the traffic through a dozen or more sites they had created, then sending that traffic to Ozy so that it washed the origin and appeared to be organic traffic. The tip-off would be that the overly inflated audience figures did not create comments, shares, and other indicators of audience engagement.
More signs of prefab interest could be seen throughout the company. The heavily referenced Ozy Festival was proving over the years to be more of a mirage than an important event. Early versions only managed to draw a few thousand people, and plans to expand to Central Park's main lawn fell apart after many promotions. They faked crowds from the prior years in advertising materials and featured guests were lured in with promises of other names who had not committed. Most were being paid to show up. The stated goal of 100,000 attendees would never be realized as they were licensed for no more than 15,000 a day. The latest incarnation fell apart and never took place.
Another story to emerge involved the wrangling found behind the scenes of one television production. Producer Brad Bessey was brought in to work on "The Carlos Watson Show," an Ozy Media production that was to run on cable's A&E Network. Bessey ended up resigning during production upon learning there was no agreement in place with that network. This is the pattern seen throughout Ozy and from Watson; dubious claims to outright lies being used to keep things moving forward.
Johan Moreno lists a number of examples where promotions from Watson would claim that he received glowing reviews or praise from various outlets, when in fact the pull quotes were often made by himself or Ozy employees, in an interview that ran in the outlet listed. It is an amazing piece of prevarication to see firsthand.
I've been tracking @ozy's questionable ad claims for YEARS!
— Johan Moreno (@dudejohan) September 27, 2021
Here are my favorites:
1/ When this magazine-style ad supplement said @DEADLINE wrote that he was the "Best Interviewer on TV." This was actually a quote from Ozy co-founder Samir Rao > https://t.co/oLFJSgOQ6S pic.twitter.com/8mHpdIVwNr
Many employees have come forward in the wake of the implosion, some detailing grueling work conditions, with others stating how the operations were a setting of dysfunction. The stunning thing, however, is how much of themselves the staffers gave for an effort that was less a media empire and more stage dressing. Many have said they realized the false impressions and faked metrics were in play, but they had an incomplete picture.
More amazing was how long it took this fraud of a media company to become exposed. Considering Carlos Watson's deep ties within journalism, why were his sham tactics, well known by some and longrunning, not exposed earlier? Those in the industry should have picked up on the numerous indicators, knowing the business as they do. Where were the media watchdogs who police the trafficking of falsehoods and fakery?
For eight years, Watson perpetrated his fraud and did so in rather blatant fashion at times. Between his fabricated evidence and repeated instances of outright deception, there could only be one reason why he was never exposed, and that would be an unwillingness in the industry to peer into his practices. Whether this was due to his race, his standing within the journalism community, or his Silicon Valley contacts, Watson was permitted to run rampant until his practice was elevated to the level of a federal crime.
Years of duplicity and scamming investors of uncounted millions and defrauding advertisers of even more does not take place entirely in the dark. A level of permissiveness or resistance to holding a figure accountable is needed for this to take place for this duration. The only saving grace in the collapse of this media company is that the fall is not so great because the heights claimed were never actually achieved. Now there is a claim that the company may not be shuttered entirely. Watson states the announcement of Ozy closing up was made prematurely, and that they will strive to return to operation.
Of course, that premature announcement on Friday had been made by Watson himself. It is left to then wonder, is he being deceptive now, or was he being deceptive then? Or, after years of spinning lies for everyone else, is he now reduced to simply deceiving himself?
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