This former MSNBC anchor says you can't build a $1 billion new media business on advertising

Nathan McAlone

Sun, Sep 25, 2016, 7:30 AM

(Carlos Watson, left, with Wil.i.am and Wyclef Jean.Ozy)

The new media landscape has seen a wave of job cuts and uncertainty in 2016, but Ozy Media CEO Carlos Watson sounds giddy when he talks about the future of his millennial-focused startup, which turned three last Friday.

“I can feel Ozy taking off,” he proclaims, though you get the sense Watson has always been optimistic about Ozy’s performance.

Watson, a former MSNBC anchor, is particularly effusive when he talks about Ozy’s first TV show, a partnership with PBS called "The Contenders," which takes a look at elections past to put the circus of our current one into perspective. The show premiered on September 13.

“Most people who try [to produce a TV show] never succeed,” Watson says. And it wasn’t always clear Ozy was going to get its own TV show. Watson says Ozy deficit financed two pilots, which was a big risk for the company. But he convinced PBS to sign a multi-million dollar deal, and now "The Contenders" is getting 16 episodes.

(Flickr/PBS PressRoom)

So what exactly is Ozy?

Ozy’s editorial mandate is expansive, and can therefore be a bit hard to pin down.

Watson says Ozy is for people who like something different, who welcome change, and have an open, creative mindset. In practice, this means Ozy focuses on “what is new” and “what is next,” two phrases Watson uses a lot. The simplest example is when Ozy profiles a rising star before they hit the mainstream. Watson points to Olympic gymnast Simone Biles, who he says Ozy profiled years before everyone else.

But while looking for what’s “next” might play well in Silicon Valley, where Ozy is based, it’s not always a recipe for monster traffic. A mainstay of many web-based media companies is the act of putting one's own spin on the news of the day. There’s a reason: people want to read about the topics people are talking about today. And it's cheaper to produce than original reporting or video.

Watson is not a fan of it. “I’m not hiring a bunch of people to summarize,” he says. He takes shots at other millennial-focused sites like Mic and Upworthy, saying they spit out the same “regurgitated,” “recycled” content. “Don’t put me in the CBA,” he laughs, meaning the minor leagues. "Put me in the NBA.”

The business

Ozy gets 20 million monthly unique visitors, but the goal isn’t grabbing massive scale and selling ads against that, according to Watson. He doesn't really think that's going to work out for anyone.

“It’s unlikely that someone will make $1 billion [online media] business based on advertising” only, he says.

Still, the money has to come from somewhere. Ozy has to eventually build a stable flow of revenue outside of venture capital funding, of which Ozy has raised at least $30 million.

Watson sees three things as central to Ozy’s financial future. The first is "digital": ad sales, and so on.

But the second is live events like Ozy Fest, a festival that started this summer, which takes inspiration from TED and Coachella, and the final one is a TV and film group.

Besides "The Contenders," there will be many more TV shows to come, Watson says. Ozy is currently shooting three more shows, has 16 in development, and has signed with powerhouse talent agency CAA.

Ozy isn't the first new media company to flock to TV. Ozy joins competitors like Vice, which has its two HBO shows and a cable channel, and Vox, which has a show on A&E.

The 'me too's'

What Watson seems to dislike the most are publications he calls the “me too’s.” Watson claims Ozy has profiled over 700 people who have gone on to be featured by outlets like The New York Times, The Economist, BBC, and so on. He wants Ozy to be first. He wants Ozy to be different.

Watson talks about Ozy being pushed by the energy of Silicon Valley, a place where unlikely things succeed. It's also a place where companies raise millions from venture capitalists only to fail spectacularly.

Perhaps it’s fitting then that the name Ozy is based on the poem "Ozymandias" by Percy Bysshe Shelley, which tells the story of the broken statue of a king, lying forgotten in the desert sand. The pedestal next to it reads: "My name is Ozymandias, king of kings: Look on my works, ye Mighty, and despair!"

Those 700 profiles of soon-to-be stars could be the building blocks of an empire for Ozy, or they could be another accomplishment of a startup that eventually ran out of cash, sitting on the internet, collecting sand.

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