Rooster Teeth, known for producing comedic web series like “Red vs. Blue,” is closing, another casualty as digital media companies struggle to gain enough followers and revenue to survive.
“[I]”It is with great regret that I announce that Rooster Teeth will close due to the challenges facing digital media as a result of fundamental changes in consumer behavior and monetization across platforms, advertising and sponsorship,” wrote the company's general manager. , Jordan Levin, in a memo to employees on Wednesday.
Rooster Teeth, owned by Warner Bros. Discovery, was one of several digital studios that gained traction during the rise of web-based video and YouTube, including Maker Studios, Fullscreen and Machinima. Many of these companies were acquired by larger media companies and eventually closed or folded into other operations.
Rooster Teeth had more than 45 million subscribers on its YouTube network, 1.2 million monthly unique visitors on its apps and more than 4 million community members, according to its website.
The company began in a spare room of one of its founders, Burnie Burns, in Austin, Texas, in 2003. The long-running comedy series “Red vs. Blue” helped fuel its growth. Rooster Teeth came to Los Angeles when he was part of the YouTube creator program that funded Rooster Teeth's first film, “Lazer Team.” Rooster Teeth is based in Austin but has a production staff in Los Angeles.
Some digital media companies that relied on tech giants like Facebook and YouTube to generate traffic have struggled to adapt to changing algorithms.
In October, Rooster Teeth removed some of its shows, including “Red vs. Blue” and “Camp Camp,” from YouTube and instead made them available only on its own website.
“YouTube revenue is no longer enough for us,” Rooster Teeth showrunner Kerry Shawcross said in an Instagram video in October.
“We know this is frustrating for some of you, but that's just the reality of what we have to do,” Shawcross said. “Animation is difficult and expensive… for the most part, our programs depend on you.”
Rooster Teeth has gone through several owners. It was purchased by Fullscreen in 2014. When the deal was announced, Fullscreen's CEO heralded Rooster Teeth as “one of the world's strongest and most authentic media brands among 18-34 year old male audiences. ”
Fullscreen was later acquired by Otter Media, which became part of Warner Bros. Discovery. Warner Bros. Discovery, led by David Zaslav, has been cutting costs and canceling select projects, including “Batgirl” and “Coyote vs. Acme” to save money. There have been serious layoffs across the entertainment industry as companies face pressure from investors to become more profitable and cope with changes in consumer behavior.
“Warner Bros. Discovery thanks Rooster Teeth's innovative creators and partners, as well as the strong management team, for its many years of success. “Your passionate and loyal fans are a testament to your achievements,” Warner Bros. Discovery said in a statement.
Rooster Teeth's Levin said in his memo to staff that the Roost Podcast Network will continue to operate.
The sale of Rooster Teeth's intellectual property and licensing rights is also being discussed.
