1996–2009: Alloy, Inc. Alloy, Inc. (also known as
Alloy Online) was founded in 1996 by James K. Johnson and Matthew Diamond as a
holding company for
Alloy, a teen-oriented magazine and website. By the time the company went public in May 1999 (its
NASDAQ symbol was ALOY), the website earned $15.5 million in monthly revenue and 1.3 million registered users. In January 2000, they purchased book publisher 17th Street Productions, renaming it
Alloy Entertainment. Alloy's additional early assets included
Delia's (acquired 2003, spun-off in 2005), CCS.com (acquired 2000, sold to
Foot Locker in 2008), and
Channel One News (acquired 2007, sold to
Houghton Mifflin Harcourt in 2014).
2009–2013: Alloy Digital In 2009, Alloy created a division called
Alloy Digital Networks to hold its online properties. Alloy was then made private through acquisition by an investment group led by ZMC in 2010 and was re-incorporated as
Alloy Digital in 2011. Within the next two years, Alloy Digital acquired
Smosh, Themis Media (parent company of
The Escapist and
WarCry Network),
Generate LA-NY, and Clevver Media. ZMC sold the Alloy Entertainment division to
Warner Bros. Television in 2012.
2013–2017: Merger and investment In October 2013, Alloy Digital and Break Media merged to become Defy Media. The deal was brokered by
RBC Capital Markets, and the resulting entity was owned in part by ZMC,
ABS Capital Partners, and
Lionsgate.
Viacom purchased a stake of Defy Media in 2014, in exchange for ownership of
GameTrailers, Addicting Games, and
Shockwave. In 2016, Defy settled a $70 million investment by
Wellington Management Company, and ZMC exited from investment in 2017.
2018: Decline and dissolution In March 2018, Defy Media laid off 8% of its headcount, exiting its
programmatic advertising and video licensing and syndication businesses. Joe Bereta, creative director of
Smosh, left his position and was replaced by a former comedy partner, Luke Barats. In June, multiple publishers claimed that Defy had not paid them for advertising. One of those publishers,
Topix, filed a lawsuit for $300,000. In July, Defy sold
The Escapist to
Enthusiast Gaming, and
Screen Junkies to
Fandom. Less than a day after this announcement, the company's assets were frozen by creditors. Defy Media's former head of audience development,
Matthew "MatPat" Patrick, stated that the company stole 1.7 million dollars from him and other
YouTubers. He claimed that the company was a
Ponzi scheme and was using YouTube creators' money in order to look more attractive to outside investors. ==Content==