Rooster Teeth is being shut down by Warner Bros. Discovery, ending two-decade run
Rooster Teeth, known for producing comedic web series such as “Red vs. Blue,” is shutting down, another casualty as digital media companies struggle to gain large enough followings and revenue to survive.
“[I]t’s with a heavy heart I announce that Rooster Teeth is shutting down due to challenges facing digital media resulting from fundamental shifts in consumer behavior and monetization across platforms, advertising, and patronage,” wrote the company’s general manager, Jordan Levin, in a memo to employees Wednesday.
Rooster Teeth, owned by Warner Bros. Discovery, is one of a number of digital studios that gained traction during the rise of web-based video and YouTube, including Maker Studios, Fullscreen and Machinima. Many such companies were acquired by larger media firms and eventually either shut down or folded into other operations.
Rooster Teeth has more than 45 million subscribers to its YouTube network, 1.2 million unique monthly visitors on its apps and more than 4 million community members, according to its website.
The company began in a spare bedroom 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 it was part of YouTube’s creator program that funded Rooster Teeth’s first film, “Lazer Team.” Rooster Teeth is based in Austin but has production staff in L.A.
Continued weakness in the television advertising market was a setback in the company’s fourth-quarter earnings. On the bright side: streaming service Max is turning a profit.
Some digital media companies that relied on tech giants including Facebook and YouTube to drive traffic have struggled to adapt to changing algorithms.
In October, Rooster Teeth removed some of its programs, including “Red vs. Blue” and “Camp Camp,” from YouTube and instead made them available only on its own website.
“YouTube revenue is just not cutting it for us anymore,” Kerry Shawcross, a Rooster Teeth showrunner, said on an Instagram video in October.
“We know that’s frustrating for some of you, but that’s just the reality of what we need to do,” Shawcross said. “Animation is hard and it’s expensive ... for the most part, our shows rely on you.”
BuzzFeed on Wednesday said it is selling youth network Complex for $108.6 million. Job losses come as media and entertainment industries are slashing costs.
Rooster Teeth has gone through several owners. It was bought by Fullscreen in 2014. When the deal was announced, Rooster Teeth was heralded by Fullscreen’s chief executive as “one of the strongest and most authentic media brands in the world amongst 18-34-year-old, male-skewing audiences.”
Fullscreen was later acquired by Otter Media, which became part of Warner Bros. Discovery. David Zaslav-run Warner Bros. Discovery has been cutting costs and killing selected projects, including “Batgirl” and “Coyote vs. Acme,” to save money. There have been severe layoffs across the entertainment industry as companies face pressure from investors to be more profitable and navigate changes in consumer behavior.
“Warner Bros. Discovery thanks Rooster Teeth’s groundbreaking creators and partners, and the strong management team, for their many years of success. Your passionate and loyal fans are testament to your achievements,” Warner Bros. Discovery said in a statement.
Rooster Teeth’s Levin said in his staff memo that the Roost Podcast Network will continue to operate.
Rooster Teeth’s intellectual property and licensing rights are also being discussed for sale. The aspects of the business that aren’t continuing are expected to be wound down in the next two months or so.
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