Media organization Ozy is shutting down less than a week after a story in the New York Times raised questions about its claims of millions of viewers and readers, while also pointing out a potential case of securities fraud.
The story triggered cancelled shows, an internal investigation, investor concern and high-level departures at the company.
Here's what you need to know about the company, what the New York Times story found and how it involves the company's chief operating officer pretending to be a YouTube executive.
What is Ozy?
Ozy was a media organization founded in 2013 and based in Mountain View, Calif., that published stories on its website, made podcasts, newsletters and shows and hosted the OzyFest festival. Its website remained up on Friday afternoon.
In a tweet, high-profile CEO and founder Carlos Watson — a former cable news anchor — claimed 25 million newsletter subscribers and more than 30 million views on YouTube.
However, its claim of a large audience has long been regarded as something of a mystery. Industry insiders said on Twitter that they'd never read or come across an Ozy story.
What did the NYT report?
Ozy has seen a snowballing crisis after a New York Times story earlier this week said the company's chief operating officer, Samir Rao, impersonated a YouTube executive on a call with Goldman Sachs while attempting to raise money from the investment bank, a potential case of securities fraud.
It also addressed long-held industry questions of whether Ozy was inflating its audience size.
In the story published Sunday, Marc Lasry — the hedge-fund billionaire and co-owner of the NBA's Milwaukee Bucks who was named Ozy chairman last month — was quoted as saying the board was aware of the February incident. He called it an "unfortunate one-time event," and supported how it had been handled.
Watson told the Times that the incident was the result of Rao having a mental health crisis, but that he had taken time off and then come back to work.
What was the aftermath?
But the story's impact has been explosive in the media industry.
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 awards show Wednesday night.
The website Crunchbase, which tracks corporate fund-raising, said Ozy had raised more than $70 million US from investors as of late 2019.
On Friday, shortly before the company shut down, Lasry also stepped down.
An emailed statement Friday from Ozy Media's board called it a company with many "world-class journalists and experienced professionals to whom we owe tremendous gratitude."
The statement 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 that the company was shutting down.
What is the now-shuttered Ozy Media — and why did its COO pretend to be a YouTube exec? - CBC.ca
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