As many as 50 YouTubers may have lost as much as $1.7 million following the collapse of Defy Media, a digital media company that produced original online content. The company seems to have suffered unbearable losses, as one of its financial backers, Ally Bank, said in a tweet.
“Ally made a loan to Defy Media that [Defy] was unable to pay back after experiencing excessive losses and the owners refused to continue to support the company,” the tweet said, adding that “Defy is being liquidated by a professional hired by their Board of Directors, and Ally stands to lose most of its loan. We are sympathetic to everyone caught up in this mess, and unfortunately Ally is also experiencing a substantial loss as a result.”
The tweet was a response to famous YouTuber Matthew “MatPat” Patrick who publicly asked Ally to pay him and fellow YouTuber the money they are owed by Defy in a YouTube video. “After trying other methods of solving the situation, nothing has worked, so at this point we have no choice but to make our fight public,” the description to Patrick’s video read.
It must be noted that Patrick wasn’t the first person to voice his concern, but his video was the first to solicit a response from Ally Bank. Fellow YouTuber Ryland Adams, who happens to be one of the most famous vloggers on the platform, had already reached out to Ally on Twitter as well and posted his own video complaint as far back as December.
Defy Media shut down back in November. The now-defunct firm is embroiled in a number of lawsuits from employees and investors for a number of purported violations, including deception.
The Problem with Multi-Channel Networks
Since 2010, YouTube has been making it easier for creators to earn Adsense revenue. However, it is still critical for creators to have someone shoulder some of the costs and problems that come with running a channel in its early stages, a fact that keeps pushing creators to partner with multichannel networks to this day. As Patrick noted in his video, partnering with those networks is imperative for “copyright protection.”
“If creators want to have copyright protection for their videos to prevent wrongful reuploads or false claims from movie studios or music labels, you have to be a part of an MCN. Based on the system that YouTube has set up, those companies are the only ones with the tools that can offer those protections,” he said.