Defy Media is in the process of shuttering a few lines of business that are resulting in the layoff of about 20 staffers, or 8% of its workforce — the latest digital-media company to pare back headcount to cut costs.
In an interview, CEO Matt Diamond said the company is exiting “tactical businesses” that were not core to Defy’s business. Those included a network programmatic ad business, which has sold ads into third-party networks with inventory, and a licensing and video syndication business to distribute partner content to long-tail internet sites.
“The changes we made in personnel were to solidly focus the company on owned-and-operated brands,” Diamond said. He said the layoffs will be completed by mid-March, and added that the former employees in Defy’s programmatic ad sales business will be able to continue operating independently.
Meanwhile, Diamond denied rumors that Defy Media has been shopping for a buyer, saying that the company is not out “actively selling ourselves” at this point. “Rumors about us selling have been out there forever,” he said.
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The core of Defy’s business continues to be its original content brands — led by Smosh, Clevver and Screen Junkies — that cater to a 15-to-29-year-old demographic. The company overall produces more than 70 shows, with more than 1 million viewers watching on average each week, according to Diamond.
“The changes we made were to accelerate profitability,” Diamond said. “For us, we feel strongly that being profitable and building around your brands is critical in this market.”
Defy Media joins the rash of belt-tightening in the digital media space. In recent months, BuzzFeed, Vox Media, Refinery29, Mashable and Funny Or Die have each made rounds of staff cutbacks.
Defy is making the job cuts to streamline the biz, according to Diamond, not because it was running low on funds. Most recently, Defy Media raised $70 million in September 2016 led by Wellington Management; previous investors in the company include Viacom and Lionsgate.
Diamond said Defy Media went out looking to raise capital last year but ultimately “we pulled back” at the beginning of 2018. “We had offers, but we were underwhelmed,” he said.
Besides its core digital business on YouTube, Facebook and other platforms, Defy Media will continue to look at longer-form TV projects in an “opportunistic” manner, Diamond said.
On that front, Defy Media recently entered into a pact with GRB Entertainment, under which the companies plan to develop and distribute an original programming slate for domestic and international distribution built on Defy’s content franchises including Smosh, AWEme, Clevver and Screen Junkies. GRB most recently acquired international distribution rights to Defy’s series “Man at Arms” and “Super Fan Builds.”
In addition, El Rey Network announced the renewal of unscripted series “Man at Arms: Art of War,” hosted by Danny Trejo, for second season. The 10-episode series will debut on the cable channel in the second half of 2018. In each episode, a team of expert craftsmen reproduce iconic weapons and armor from scratch, using technology that would have been available at the time they were originally created.
Separately, last year Defy Media said it instituted new HR measures following the firing of Screen Junkies founder Andy Signore for inappropriate sexual behavior. Under the company’s new policies, sexual-harassment training is mandatory for all employees.