Defy Media ceases all operations following earlier struggles

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Defy Media's Smosh features comedy.
Defy Media's Smosh features comedy. Credit: Composite by Ad Age

After stiffing publishers on money owed from its programmatic business, Defy Media, which operates popular YouTube brands such as Smosh and Clevver, shut down Tuesday.

It's unclear exactly what prompted its closure, but the digital media company had been dealing with money problems. Back in June, Defy opted to close its programmatic business after failing to find a buyer. The move left many publishers – some of which were owed as much as $40,000 – unpaid.

After closing its programmatic business, the company had hoped to pivot its attention toward its digital content creation business. Obviously, that move never panned out.

Instead, on Monday the company laid off its entire staff and said it would cease all operations, leaving many of its brands without a home.

"Regretfully, Defy Media has ceased operations today," the company said in an emailed statement. "We are extremely proud of what we accomplished here at Defy and in particular want to thank all the employees who worked here …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."

One Defy insider, who asked to remain anonymous as they weren't authorized to speak on the matter, says the company is actively selling off its brands, adding that "everyone except a small team to help with that process has been laid off."

As for those publishers who are still waiting to get paid, it is unclear if and when that might happen.

"This is incredibly painful and I hate this situation," a high-level Defy executive told Ad Age in June. "I want to get everyone paid out dollar for dollar, but we do want to land the plane properly. I can't promise that [everyone will be paid] at this point."

Viacom, Lionsgate, ABS Capital Partners and WMG all have stakes in the company, which employed roughly 150 people and operated Smosh and Clevver News, two popular YouTube channels with roughly 28 million subscribers combined. The company's website is still operational and shares no news about the closure.

The Hollywood Reporter first reported the news.

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