Warner Bros. Discovery announced that it plans to shut down the iconic digital media brand Rooster Teeth. Now a division of WBD devoted to “fandom, gaming, and comedy,” the Rooster Teeth team were early internet content creation pioneers, serving up original independent media before YouTube was even a twinkle in Steve Chen, Chad Hurley, and Jawed Karim’s eyes. (They’re the three former PayPal guys who founded YouTube.) In fact, the Rooster Teeth brand celebrated its 20th anniversary just last year.
Rooster Teeth’s Closure is Part of a Larger Trend
Sadly, shutting down RT means that its staff of 150 full-time employees – along with a larger team of contractors and freelance creators – will lose their jobs. It also leaves decades of content in a place of genuine uncertainty. As former Machinima staffer Eliot Dewberry warned on Twitter/X, when WarnerMedia shut that legacy digital brand down in 2019, they essentially pulled its complete content library from the internet. Though WBD will likely make deals for the most popular and licensable Rooster Teeth content – like the anime-inspired animated action series “RWBY” or Michael B. Jordan’s mecha series “Gen:Lock” – other Rooster Teeth productions could legitimately vanish from the internet forever, as if they never existed.
The winding down of Rooster Teeth is by no means an independent, standalone event. It’s one small part of a larger collapse in digital media and the internet economy that we’ve been witnessing for several years, back to 2020 at least. While some of these brands and companies clearly suffered from a degree of mismanagement, there are larger trends at play here. As mainstream streaming services, social media platforms and apps monopolize an increasing share of internet traffic and usage, independent news organizations and media companies are seeing their traffic shrink. Investment in content and media is way down, and even as the digital ad market shows signs of recovery, these funds are getting soaked up by the largest platforms and tech companies, not publishers or media brands, and especially not individual creators.
So the industry has entered a vicious self-devouring cycle. As budgets fall, publishers and media companies are forced to cut corners, lay off writers and reporters and creators, and generally scale down their products and output. This causes traffic and ad rates to drop even further, sending more and more of their readership and following to other outlets, including aggregators like Reddit or Google News and social media platforms. Once a brand is on that downward trajectory, it’s very hard to pull back out and restore its lost audience and revenue streams.
The Early Years
Going back even further, the story of Rooster Teeth provides an excellent overview of the last two decades in digital media, and many of the trends that changed and impacted the way we all find and watch content online. Not many internet creators can say they have over 20 years of experience; the Rooster Teeth team was around for essentially the dawn of this industry, and the brand’s disappearance is a genuine “end of an era” moment.
Rooster Teeth was born out of the friendship of several students from the University of Texas at Austin in the late 1990s, including Burnie Burns, Matt Hullum, and Joel Heyman. They soon teamed with a few more friends to create the website DrunkGamers.com, on which they’d review video games while intoxicated. As the content became more polished, and the team started seeking a larger audience for their content, they swapped this out for Rooster Teeth, believing it was more commercial to not have “drunk” in their brand name.
In the early ‘00s, the DrunkGamers team started experimenting with a new genre of content which ultimately came to be known as “machinima,” using video games as an animation tool and adding voiceover to create an original story. In 2002, the website posted a trailer for a potential show called “Red vs Blue,” using clips from the first “Halo” video game as visuals, along with humorous original dialogue. The first full episode was released the following year, in 2003.
“Red vs. Blue” became an early internet video hit, years before the launch of YouTube centralized internet video fans and creators in one place. Rooster Teeth built an audience for the show independently through a vast variety of outlets and distribution channels, from their own website, aggregators like Fark and Digg, deals with publications like Computer Gaming World (which included the “Red vs. Blue” trailer in a supplemental CD that sold with the magazine), console-based platforms like Xbox Live Marketplace, and more.
For the first few years of its existence, the Rooster Teeth team viewed YouTube as a competitor and attempted to drive more of the traffic for their shows back to their own website rather than this third-party platform. Over time, as YouTube ascended to its current spot atop the streaming world, inevitably this was where Rooster Teeth’s viewers wound up, functionally forcing their hand.
Millennial-Hungry Hollywood Comes Calling
By the late ‘00s and early ‘10s, it had become obvious to Hollywood studios and corporate media companies that digital creators were here to stay, and had the attention of the teen and 20-something viewers of most value to advertisers. Unlike a lot of fellow YouTube creators who experienced an explosion of popularity in this era, whose content was very specifically geared toward the world of YouTube and online culture, Rooster Teeth’s team always saw themselves as straddling the niche world of internet creators and the wider universe of Hollywood media and entertainment. As co-founder Burnie Burns told The Guardian in 2015: “There used to be really hard lines. ‘This is a theatrical movie, this is a television show, this is a web series’. But as technology becomes ubiquitous for delivering content, those hard lines blur and you end up on a spectrum where it’s not always clear.”
By the mid-’10s, big companies desperately trying to capture young viewers (“millennials” who were still in their teens and 20s) had the option of trying to copy or recreate what YouTubers were making, or just buy out those YouTubers and bring them in-house. In 2014, The Walt Disney Company purchased creator-founded Maker Studios for $500 million. (The deal’s various performance-based revenue targets mean the total probably came out to more like $950 million.) Originally a collective of just a handful of very popular YouTubers, by this era Maker had expanded to thousands of creators, with collectively hundreds of millions of subscribers, responsible for 5.5 billion video views per month.
Rooster Teeth’s approach, of making narrative content for YouTube that had wider potential to appeal to mainstream fans, made them another natural target for corporate acquisition. That same year, they were purchased by a different network of YouTube channels, Fullscreen. Like Maker, Fullscreen had launched in 2011 as an affiliated network of YouTube creators, before being sold to AT&T and The Chernin Group’s joint youth-focused venture, Otter Media, also in 2014.
Fullscreen was so confident in its creator-first approach, it actually launched a bespoke subscription streaming service in 2016, available through Roku, iOS and Google devices, and Amazon Channels. Because of their connection to parent company AT&T, subscriptions were free to AT&T subscribers. [Full Disclosure: In 2015, I wrote and produced an original series for the Fullscreen service, called “FANtasies.”]
As so many other short-lived niche streaming services discovered, it was nearly impossible to complete with the cultural dominance of major players like Netflix and Amazon Prime Video, and Fullscreen failed to build an organic audience with its combination of original and licensed content. The subscription platform shut down just two years after its launch, in 2018. That same year, AT&T bought out Chernin Group’s stake in Fullscreen and folded the entire division into its WarnerMedia subsidiary. Though there was discussion about WarnerMedia possibly selling off Rooster Teeth prior to its merger with Discovery and the formation of Warner Bros. Discovery, this deal never went through.
The Present Moment
It’s worth noting how little any of this Hollywood and Wall Street deal-making had to do with the work being done by Rooster Teeth, or its success with fans. Throughout this period, the company continued producing popular and well-received content, including the live-action sci-fi comedy film “Lazer Team” and the wildly successful anime-inspired fantasy action series “RWBY,” which has run for 9 seasons, inspired multiple spinoff projects, and remains a viable and ongoing franchise to this day. In a brief return to their late ‘00s strategy, just last year, the company pulled most of its animated content off of YouTube, encouraging fans to watch on their own website in hopes of boosting ad revenue.
Which brings us to the present moment. Multi-channel networks like Maker Studios and Fullscreen are no longer in fashion, and a major decline in ad revenue for user-generated content means that the business model has been deemed essentially impractical. Hollywood’s long-ago interest in acquiring independent online outlets has subsided, as media companies and brands look for ways to tighten their belts and no longer feel the need, or even see the value, in purchasing internet brands for themselves. Internet-first projects (like, for example, the iconic independently-produced video game franchise “Five Nights at Freddy’s”) can still crossover and make studios a billion dollars, but they don’t need to invest in an entire team or company of creators; they can just buy the name of the hit franchise, or hire a few creatives and generate their own IP in-house.
But for the previous generations of internet creators and brands that already got scooped up by the system, it’s arguably too late. Last year, original Smosh founders Ian Hecox and Anthony Padilla re-acquired the rights to their creation, which had wound up in the hands of fellow YouTubers Rhett & Link through their company, Mythical Entertainment. (In 2011, Smosh had been soaked up by another now-defunct collective of YouTube channels and brands, Defy Media.) But their story is the exception rather than the rule. Other pioneering early YouTube channels and brands, if they’re still around at all, are largely owned by legacy media or tech companies, and continue to exist at their pleasure.
So if you like the content on one of these old-school channels, maybe consider downloading their archives. Because as the lesson of Machinima teaches us, it may not be around forever.
