After failing to sell the underperforming fandom, gaming, and comedic entertainment sector, parent firm Warner Bros. Discovery ceases operations at Rooster Teeth. RT general manager Jordan Levin announced the closure of Austin-based Rooster Teeth at an all-hands meeting on Wednesday and in a memo circulated to employees. Rooster Teeth’s closure will result in layoffs of around 150 full-time employees and dozens of contractors and content developers.
“[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 behaviour 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.”
Discovery is now in talks to acquire the rights to select Rooster Teeth catalogue content and intellectual property
Warner Bros. Discovery is now in talks to acquire the rights to select Rooster Teeth catalogue content and intellectual property, including the popular anime-style series “RWBY” (shown above), the groundbreaking sci-fi parody “Red vs. Blue,” and Michael B. Jordan’s animated mecha series “Gen: Lock.” In addition, WBD is looking to sell the Roost podcast network, which includes shows about gaming, true crime, fandom, comedy, and food. For the time being, the network will remain operational. “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. “Your passionate and loyal fans are a testament to your achievements.”
Last year, Rooster Teeth celebrated its 20th anniversary with the introduction of new logos and a new motto, “Just Playing.” Years before YouTube, the company had built a loyal following and established itself as an internet video destination. Its first viral video was the 2003 premiere of “Red vs. Blue,” an animated comedy series that popularized machinima. The company’s name was drawn from language in the original trailer for “Red vs. Blue” — in which the voiceover narrator is referred to as a “cock bite.”
Rooster Teeth was established in 2003 by Burnie Burns, Matt Hullum, Geoff Ramsey, Jason Saldaña, Gus Sorola, and Joel Heyman. After several ownership changes, it joined Warner Bros. Discovery two years ago. In 2019, then-owner WarnerMedia appointed Levin, former CEO of the WB, as general manager of Rooster Teeth as part of a reorganization that saw Hullum (formerly RT’s CEO), Burns, and Ramsey take on new creative roles within the company. Burns left Rooster Teeth in 2020. Rooster Teeth was acquired by Fullscreen in 2014, which was then acquired by Otter Media (an AT&T and Chernin Group joint venture), before becoming a part of WarnerMedia under AT&T’s control. In 2022, Discovery completed the acquisition of WarnerMedia to establish Warner Bros. Discovery.
At one point, it had almost 400 employees
Since its inception, Rooster Teeth has offered a subscription video-on-demand service, which it relaunched as First in 2016. At its peak, Rooster Teeth’s First had over 225,000 paying members during the popularity of “RWBY” and “Gen: Lock,” but has since declined to around 60,000. Warner Bros. Discovery will notify users of the service’s discontinuation in the coming weeks.
At one point, Rooster Teeth had almost 400 employees. It has repeatedly reduced its workforce in an attempt to make the company profitable, but to no avail; Rooster Teeth has been losing money for the past decade. In addition to its core content business, Rooster Teeth sold goods and ran the RTX in-person fan conventions starting in 2011. Levin recently announced that the 2024 RTX would be cancelled — and told staff that the event has never been profitable.
Levin’s March 6 memo to staff about the company’s shutdown:
Dear Rooster Teeth,
Since our founders created and uploaded their first video on the then-called World Wide Web in 2003, Rooster Teeth has been a source of creativity, laughter, and lasting innovation in the wildly volatile media industry.
We’ve read the headlines about industry-wide layoffs and closures, and you’ve heard me give my perspective and updates on the rapidly changing state of media and entertainment during each of our monthly All Hands meetings.
Since inheriting ownership and control of Rooster Teeth from AT&T following its acquisition of TimeWarner, Warner Bros. Discovery continued its investment in our company, content and community. Now however, it’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 behaviour and monetization across platforms, advertising, and patronage.
Please note that the Roost team is not currently impacted by this action. The Roost Podcast Network will continue operating and fulfilling its obligations while WBD evaluates outside interest in acquiring this growing asset.
In the coming days and weeks, we will have many questions to answer and the opportunity to work together to implement the best way to wind things down for us and our community. We’re working through what comes next in real-time, and we will be as open, direct, and accessible as possible. Thank you all in advance for your patience and support of one another.
