Viacom Takes a Minority Stake in Defy Media — But That’s Not All

/ Jun 9, 2014

Smosh: The Movie

Viacom has taken a minority stake in Defy Media, the digital media company formed by the merger of Alloy Digital and Break Media last October.

Defy Media focuses on creating content for 13- to 34-year-olds across digital platforms. Its top assets including Smosh,, Clevver Media, Made Man, and Screen Junkies, among other websites and channels.

Altogether, Defy says its audience now exceeds 155 million unique viewers across its owned-and-operated platforms, watching more than 400 million videos per month. On YouTube, the company’s various brands reach 40 million subscribers, while the non-YouTube social following tops 55 million. On mobile, its mobile-video apps have surpassed 10 million downloads.

It’s this audience reach — both on YouTube and off YouTube — that spurred on the Viacom investment, according to Defy Media. Per the announcement, the media conglomerate will look to “benefit from Defy’s targeted digital brands for young audiences.” This includes working with Defy talent and personalities on unique content and marketing campaigns.

Additionally, the two companies have entered into a marketing and content-syndication agreement “that will draw on their respective scale and expertise in developing and distributing entertainment to influential audiences.” In other words: Defy will now get marketing support for its brands from Viacom.

In exchange for all of this, Defy is acquiring three gaming-focused digital properties from Viacom: Addicting GamesGameTrailers, and Shockwave. They join a gaming-centric portfolio at Defy that already includes GameTrailersSmosh GamesThe Escapist, and Gamefront.

Defy says this deal adds new revenue stream, including subscription-based platforms, while also expanding its overall reach.

“We formed DEFY with the belief that our infrastructure and brands represent the strongest platform in digital media for reach and scale to the 13-34 year old audience and with Viacom’s partnership we now have additional assets and support to fulfill that vision,” said Matthew Diamond, CEO of Defy Media, in a statement. “These outstanding brands represent meaningful and diverse revenue opportunities we aim to expand across our existing brand portfolio.”

Financial terms of the deal are not being disclosed by either company. Viacom joins existing Defy Media investors including ZelnickMedia, Lionsgate, and ABS Capital. An executive from the media conglomerate will join Defy’s board as part of the transaction.

The deal is yet another instance of a traditional media making an investment in the digital media space. A lot of this type of activity has been in the MCN space, with Disney acquiring Maker Studios for close to a billion dollars (potentially), and many suitors for fellow MCN giant Fullscreen. Defy Media isn’t an MCN in the Maker or Fullscreen sense, but the company does operate a network of successful YouTube channels, including multiple channels under the Smosh and Clevver umbrellas.

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