June 9, 2014 Last Updated 4:22 pm

DEFY Media acquires Viacom’s gaming focused digital properties Addicting Games, GameTrailers and Shockwave

Viacom will take a minority stake in DEFY and enter into a marketing and content syndication agreement

Press Release:

New York, NY – June 9, 2014 -– DEFY Media, LLC., a leading creator and distributor of digital content, and Viacom Inc. (Nasdaq: VIAB, VIA) today announced that DEFY has acquired Viacom’s gaming focused digital properties Addicting Games, GameTrailers and Shockwave, extending the Company’s portfolio of digital properties and further strengthening its reach to 13-34 year old consumers. In consideration for the digital properties, Viacom will receive a minority interest in DEFY (formed by the Alloy Digital and Break Media “merger of equals”). The two companies have also entered into marketing and content syndication agreements that will draw on their respective scale and expertise in developing and distributing entertainment to influential audiences.

The addition of Viacom’s digital gaming properties significantly expands and deepens DEFY’s gaming and entertainment portfolio, which now includes GameTrailers, SMOSH Games, ranked among YouTube’s fastest growing channels ever, award-winning The Escapist, and Gamefront, along with other digital properties and premium partners focused on the interests of gaming enthusiasts. The transaction adds new revenue streams for DEFY, including subscription based platforms, while also greatly expanding the Company’s targeted offerings for advertisers.

“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,” commented Matthew Diamond, CEO of DEFY Media. “These outstanding brands represent meaningful and diverse revenue opportunities we aim to expand across our existing brand portfolio.”

The transaction is the latest move in expanding DEFY’s online reach and further diversifies a brand portfolio that already includes Break, SMOSH, AWEme, Clevver, The Gloss, Made Man and Screen Junkies. In total, the company’s owned and operated reach now exceeds 155 million monthly unique viewers watching more than 400 million monthly videos monthly. The DEFY Media brands attract 40 million YouTube subscribers and 55 million followers on social media (both up 40% since the merger), and they recently crossed the 10 million mark in downloads of video viewing mobile apps.

DEFY Media’s content ownership model and sophisticated distribution capabilities make the company a logical partner for Viacom, which will benefit from DEFY’s targeted digital brands for young audiences. The investment in DEFY Media allows Viacom to benefit from the company’s substantial reach and also tap into unique content and marketing opportunities with the company’s top digital talent and personalities.

Viacom joins existing DEFY Media investors that include ZelnickMedia, Lionsgate (NYSE: LGF), and ABS Capital. A representative from Viacom will join the DEFY Media board.

Financial details of the transaction were not disclosed.

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