Revelations about exaggerated audience sizes helped sink the star-studded digital news outlet
All the right boxes looked to have been ticked when digital media company Ozy began. Launched in 2013 with the intention of shaking up both online and broadcast journalism, the American startup quickly gained status and credit for its serious approach and diverse team.
But this weekend the Ozy story is over, despite an early reputation that had benefited from links to leading names in broadcasting, including Oprah Winfrey, the BBC’s former US anchorwoman Katty Kay, and Jana Bennett, at one time among the most powerful women in British television.
After embarrassing revelations last week about a fake presentation to Goldman Sachs officials given by one of Ozy’s founders, the walls crumbled. Kay, who had left the BBC in June after a 30-year association to join Ozy, took the decision to resign. On Friday the organisation formally closed down, leaving investors and contributors amazed by the size of the gap between Ozy’s projections of its own success and viewership figures and the realities now revealed.
The California-based company, founded by Harvard alumni and former Goldman Sachs employees Carlos Watson and Samir Rao, has announced that it has ceased to operate, but given no reasons. An emailed statement from Ozy’s board sent out on Friday called it a company with many “world-class journalists and experienced professionals to whom we owe tremendous gratitude”. It said it was “with the heaviest of hearts that we must announce today that we are closing Ozy’s doors”.
The move came less than a week after the New York Times raised questions about its claims to have millions of viewers and readers, and looked at its potential culpability in a securities fraud. The shocking report prompted several departures aside from Kay’s, and triggered an internal investigation after investors expressed concern.
On Thursday, Marc Lasry, the hedge fund billionaire who had been named as Ozy’s chairman last month, resigned, citing the need for someone more experienced in crisis management and investigations.
The New York Times’s story claimed that Ozy’s chief operating officer, Rao, had impersonated a YouTube executive on a call with Goldman Sachs while attempting to raise money.
Alex Piper, the head of unscripted programming for YouTube Originals, was due to take part in a Zoom call with the investment bank team, which at the last minute was switched to a conference call.
Then, according to the newspaper’s report, a voice claiming to be Piper’s went on to reassure the bankers that Ozy was doing well on YouTube. According to the report, just days later Watson apologised to Goldman Sachs, saying the voice had actually belonged to his partner, Rao. Watson, who also presented a podcast with Kay called When Katty Met Carlos for the BBC World Service, went on to put the strange incident down to a mental health crisis.
“Samir is a valued colleague and a close friend,” Watson said, adding: “I’m proud that we stood by him while he struggled, and we’re all glad to see him now thriving again.”
In a statement, the then Ozy chair, Lasry, said his board had been told about the phoney call and supported the way it was handled. “The incident was an unfortunate one-time event, and Carlos and his team showed the kind of compassion we would all want if any of us faced a difficult situation in our own lives.”
The New York Times article also asked questions about whether Ozy was inflating its audience size. Watson had claimed in a tweet that it had 25 million newsletter subscribers, but the newspaper said fewer than 500,000 people went to Ozy’s website in June and July, according to data stored with media analyst Comscore.
Watson, who won an Emmy in the news discussion and analysis category last year for the show OWN Spotlight: Black Women OWN the Conversation, which he hosted on the Oprah Winfrey Network, stepped down from hosting a documentary Emmy awards show on Wednesday night.