Variety: Rooster Teeth Is Shutting Down After 21 Years

Story from Variety:

Rooster Teeth is biting the dust after more than two decades.

Parent company Warner Bros. Discovery, after unsuccessful attempts to sell the unprofitable fandom, gaming and comedy entertainment division, is shutting down Rooster Teeth’s operations. RT general manager Jordan Levin announced the shutdown of Austin-based Rooster Teeth at an all-hands meeting Wednesday and in a memo distributed to staff.

The closure of Rooster Teeth will result in layoffs of its approximately 150 full-time employees and will throw dozens of contractors and content creators out of work as well.

“[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,” Levin wrote in the memo, obtained by Variety. “Our legacy is not just a collection of content but a history of pixels burned into our screens, minds, and hearts.”

Warner Bros. Discovery is currently in talks to sell the rights to certain Rooster Teeth catalog content and intellectual property such as the popular anime-style series “RWBY” (pictured above), pioneering sci-fi spoof “Red vs. Blue,” and Michael B. Jordan’s animated mecha series “Gen:Lock.” In addition, Warner Bros. Discovery is seeking to sell the Roost podcast network, with shows spanning gaming, true crime, fandom, comedy and food, which for the time being will continue to operate.

“Warner Bros. Discovery thanks Rooster Teeth’s groundbreaking creators and partners, and the strong management team, for their many years of success,” the media company said in a statement. “Your passionate and loyal fans are testament to your achievements.”

Rooster Teeth celebrated its 20th birthday last year with the launch of new logos and a new tagline, “Just Playing.” The company had cultivated an ardent fanbase and became an internet-video destination years before the advent of YouTube. Its first viral video came with the 2003 debut of “Red vs. Blue,” an animated comedy series that popularized machinima. The company’s name was derived from dialogue in the original trailer for “Red vs. Blue” — in which the voiceover narrator is dissed by the subtitler as a “cock bite.”

Rooster Teeth was founded in 2003 by Burnie Burns, Matt Hullum, Geoff Ramsey, Jason Saldaña, Gus Sorola and Joel Heyman. After multiple ownership changes, it became part of Warner Bros. Discovery two years ago. In 2019, then-owner WarnerMedia tapped Levin, former CEO of the WB, as general manager of Rooster Teeth as part of a reorg in which Hullum (previously RT’s CEO), Burns and Ramsey took on new creative roles at the company. Burns exited Rooster Teeth in 2020.

In 2014, Rooster Teeth was bought by Fullscreen, which in turn was bought by Otter Media (a joint venture of AT&T and Chernin Group) before Rooster Teeth became part of WarnerMedia under AT&T’s ownership. In 2022, Discovery closed the acquisition WarnerMedia to form Warner Bros. Discovery.

Rooster Teeth had operated a subscription video-on-demand service from its earliest days, and in 2016 rebranded the service as First. At its peak, Rooster Teeth’s First had about 225,000 paying members at the height of the popularity of “RWBY” and “Gen:Lock,” but has fallen off to about 60,000 today. Warner Bros. Discovery will be communicating with subscribers within the next few weeks about the service’s shutdown.

At one point, Rooster Teeth’s staff had ballooned to a headcount of more than 400. It continually winnowed its ranks over the years in attempts to turn the enterprise profitable to no avail; Rooster Teeth has operated at a loss for the past decade. In addition to its core content biz, Rooster Teeth sold merchandise and had run the RTX in-person fan conventions starting in 2011. Levin recently announced that the 2024 RTX would be canceled — and told staff that the event has never been profitable.

Among the company’s controversies, Rooster Teeth in 2022 issued an open statement of apology for “hateful and hurtful” conduct toward employees over the years, coming after a former staff member detailed her experiences of being harassed, underpaid and marginalized at the company.