Defunct YouTube MCN Defy Media Called Out for Unethical Practices

By Nitish Singh / December 5, 2018

Defy Media was one of the biggest network partnership companies that focused on creating YouTube content through its partnership with a number of high-profile channels including Smosh and Clevver. Last month the company notified its employees out of the blue that it is shutting down and that the staff would be losing their jobs. They also held on to the paychecks of the employees and simply ‘folded.’

Anthony Padilla of Smosh revealed “I sold Smosh for zero dollars. That’s on me — that’s on us. We had no representation. We didn’t understand. I don’t know if we were purposely taken advantage of, but we were taken advantage of, and that’s my bad. I should have taken my time to figure out what selling really meant and what stocks really meant, but you live, and you learn.”

YouTuber Ryland Adams talked about how the multi-channel network (MCN) scammed dozens of YouTube channels over the years. There were over 50 content creators on Google’s video sharing platform who were partnered with the company, and some of them had subscriber counts well above a million. The MCN allowed the content creators to earn sponsorships from companies, run ads and generate massive amounts of revenue.

Defy Media had 400 employees working with the content creators to keep the business running. On November 6, the company folded and folded with hundreds of thousands of dollars pending. The company essentially worked as a talent agency would in a non-virtual world. It was responsible for managing sponsorships, ads and other promotional content and in return, it got to keep a percentage of the YouTubers’ AdSense revenue.

A month after Defy shut down, content creators on YouTube still have no means of recovering outstanding debts. There is no communication from the company with the creators or the executives who used to work at Defy. It remains to be seen if those affected are able to recover their losses from the content creator and how MCNs are seen in the YouTube community going forward.

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