Defy Media

» see defymedia.com as it lived, on the wayback machine

~ the obituary ~

Smosh is the only Defy brand i actually recognized at the time, and that was through the youtube algorithm forwarding me Smosh shorts in the early 2010s. The rest of the Defy portfolio (Screen Junkies, Clevver, The Escapist, Made Man) sat in the part of the english-language internet that did not really cross over to a turkish engineering audience. So Defy was a thing that existed at the edge of my awareness as "the company that owns Smosh" without ever being a brand i went looking for.

Defy itself was a holding company that formed in October 2013 from the merger of Alloy Digital and Break Media. Alloy was older, going back to 1996 as Alloy Online, a teen-focused content network. Break was the male-skewing video site that had bought a stake in Screen Junkies. The merger was financial engineering by RBC Capital Markets and a coalition of private-equity firms (ZMC, ABS Capital Partners, Lionsgate), with the bet being that bundling enough youtube-adjacent properties together would produce a venture-scale digital media company.

For about three years the bundle worked well enough. By 2016 Defy was raising another 70 million dollars from Wellington Management and was being talked about as a possible IPO candidate. By late 2018 the same company was failing to pay invoices to small publishers, had been sued by Topix for 300 thousand dollars in unpaid ads, and was being kept alive on creditor patience that ran out on 6 November 2018.

~ the case file ~

~ how it landed ~

Defy's pitch to investors was that the ad-supported youtube creator economy was going to consolidate into a few large media holding companies, and Defy was going to be one of them. The model was branded entertainment for advertisers who wanted to reach the young male digital-native audience that traditional media could no longer reach through TV. Smosh, Screen Junkies, Clevver, Made Man, The Escapist. Each property had its own subculture and its own demographic. Together they had enough ad inventory to do upfronts the way a small cable network might.

In 2014 Viacom paid for a stake in Defy by handing over GameTrailers, Addicting Games and Shockwave.com. This is the kind of deal that looks like a vote of confidence from a major media company but is actually Viacom unloading three properties it no longer wanted to operate. GameTrailers would be shut down in 2016 under Defy's ownership. Addicting Games and Shockwave faded out around the same time.

~ the slide ~

Defy's revenue depended on programmatic display ads and on direct ad-sales packages built around its YouTube channels. Both lines weakened in 2017 and 2018. YouTube's "adpocalypse" sent CPMs down across the entire creator economy. Brand advertisers got more selective about what kinds of YouTube content they would appear on. Defy's gaming and meme-comedy properties were exactly the kind of content the new ad-safety rules sometimes flagged.

In March 2018 Defy laid off 8% of its staff and exited two business lines: programmatic ad sales and video licensing/syndication. In July 2018 it sold Screen Junkies to Fandom and The Escapist to Enthusiast Gaming, both as part of a fire-sale to preserve cash. Through that summer multiple small publishers reported that Defy had stopped paying invoices. The Topix lawsuit was filed in June. Other suits followed.

~ what came after ~

On 6 November 2018, Defy ceased operations with no advance notice. Staff at the Beverly Hills office showed up to be told the company was done. Smosh, the highest-profile brand, was rescued days later by a management buyout led by founders Ian Hecox and Anthony Padilla, who bought the brand out of Defy's wind-down for an undisclosed amount and made Smosh independent again. Clevver Media's staff was let go in the same wave. Most of the smaller properties simply ended.

Defy's collapse landed at the same moment as the broader 2018 reckoning about youtube creator economics. Maker Studios had collapsed inside Disney the year before. Awesomeness was being wound down at Verizon. Fullscreen was pivoting out of MCN territory. The thesis that owning a stable of youtube creators was a path to a real media company did not survive 2018. Defy was the loudest of the failures because it failed on a single day, with the doors locked, the way old businesses used to die.

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