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Ozy Media Faces Withering Criticism After NY Times Exposé: ‘What an Obvious Scam’

Media industry figures question if ”Ozy is a mirage of a media company“

Ozy Media has come under intense criticism this week following a New York Times exposé accusing the company of inflating its web and video numbers and revealing an FBI fraud investigation into one of its top executives.

“It’s amazing what an obvious scam Ozy is,” former MSNBC anchor Krystal Ball said. “Look at the stats for this YouTube video. 90k views but only 12 likes and a single comment in which someone points out what an obvious scam it is.”

Bloomberg’s Jason Schreier also questioned the lack of engagement on videos: “Excellent reporting about a sham media company with millions of imaginary views and subscribers. Their YouTube channel is hilarious — here’s one video with 152,000 views and… 7 likes.”

“Ozy once pitched me a story about it having 25 million newsletter subscribers — an astonishing number — but demurred for weeks when asked for evidence,” recalled Adweek’s Mark Stenberg. “Eventually, I was told it was ‘going with another outlet,’ but that story never materialized.”

And CNN’s Brian Stelter tweeted that Ozy CEO Carlos Watson’s memo to staff “has received very little traction on social” — a fact that underscored Times media columnist Ben Smith’s point “that Ozy is a mirage of a media company.”

Among the criticism of Ozy were numerous people questioning the company’s claims of widespread reach. A few pointed out they’d never seen Ozy content shared organically. Former USA Today editor in chief Joanne Lipman wondered if other outlets “are guilty of the crazily inflated views scam.”

Hamilton Nolan, who serves as the Columbia Journalism Review’s public editor for the Washington Post, added, “Journalism is a field where people who are good at writing and reporting get paid $60k to produce news, and ‘Media’ is a field where people who are good at nothing get paid a million dollars to trick rich people into losing money.”

He linked to the Times story, which revealed the details of a phone call with Goldman Sachs investors in which Ozy co-founder Samir Rao pretended to be a Google executive to vouch for Ozy videos’ audience numbers — which led Goldman to contact the FBI about possible fraud. Watson has said Rao was having a mental health crisis and coverage of the issue is unkind.

On Monday, Watson spoke to TheWrap and called the Times piece “a bulls— ad hominem attack,” defending Rao and disputing that Ozy has overstated its web and video stream figures. He said the company’s revenue last year rose to $50 million, and came primarily from non-web properties including newsletters, podcasts, TV shows and Facebook and YouTube streams. Live festivals, another important revenue stream for the company, have been on hiatus during COVID.