Defy Media Announces Total Shutdown, Is Ceasing Operations Effective Immediately

By 11/06/2018
Defy Media Announces Total Shutdown, Is Ceasing Operations Effective Immediately

Defy Media is shutting down, effective immediately. The YouTube multi-channel network and digital content studio issued the following statement:

Regretfully, Defy Media has ceased operations today. We are extremely proud of what we accomplished here at Defy and in particular want to thank all the employees who worked here. We deeply regret the impact that this has had on them today. These are some of the best people in the world in creating digital programming and building audiences around it. Without them, brands like Clevver, Smosh, and AweMe could not have built up over 75 million YouTube subscribers and 120mm social media followers. Unfortunately, market conditions got in the way of us completing our mission. Our main focus right now is to find homes for these great brands and people so that they can continue to thrill and delight their millions of viewers with as little interruption as possible.

The shutdown comes on the heels of Tuesday morning’s news that Defy had given layoff notice to all employees based out of its Beverly Hills production office, and the office would be permanently closed. Employees who received that notice were told they would continue work and continue to be paid until Jan. 2, 2019, “unless informed of a different separation date.” Now it’s clear that all employees across the company’s Los Angeles and New York offices are included in the layoffs, except for a handful of executives tasked with selling off the remaining Defy Media brands. Productions on those brands will also cease until new owners are found.

One of Defy’s most notable creators and the remaining half of the original Smosh duo Ian Hecox took to Twitter shortly after news broke to comment on the events of his parent company and what’s next for Smosh.

For what it’s worth, Hecox isn’t lying. The past several months have been some of Smosh’s best in years. According to internal Tubefilter data, the channel has averaged more than 90 million views a month since June 2018. The last time Smosh witnessed that kind of streak was back in March 2016, when an 11-month stretch of 90 million views a month or more came to an end.

Defy’s shutdown follows a tough year-plus on nearly all fronts for the company. After raising $70 million in capital in 2016, it declined to ingest more money in 2017 due to underwhelming offers from potential investors. At the beginning of this year, it laid off 8% of its workforce, shuttering side operations — a programmatic advertising division and a licensing and video syndication division — in order to focus on its hallmark content brands Smosh, Clevver, and Screen Junkies (which it later sold).

Defy also weathered rumors it was looking to sell — rumors CEO Matt Diamond refuted — especially after the sale of Screen Junkies and gaming publication Escapist Magazine, both in July. (Financial details of the sales were not disclosed.)

As it shutters, Defy reportedly still owes numerous publishers — including Topix, the plaintiff in a related $300,000 lawsuit against Defy — money from its programmatic ad division. Digiday reported Defy offered to pay out 20% of what it owed, but that offer appears to have been declined by multiple companies.

Another lawsuit on Defy’s plate was filed in August by Screen Junkies founder Andy Signore, whom Defy fired in October 2017 after multiple women reported sexual misconduct. In his filing, Signore alleges, “Defy Media, LLC had long partaken in a pattern of objectifying and demoralizing people, especially women, for financial gain or personal entertainment.” He also claims that members of Defy’s management team as well as shareholders had relationships with employees, interns, and fans, and “fostered a company culture of profanity and obscenity.”

At the time of its closing, Defy was producing 75 biweekly series and counted roughly 250 employees.