This Is Why Rooster Teeth Shut Down

After 20 years, Rooster Teeth announced today that it is shutting down. The reason for the shutdown, though, is a bit more complicated than one might think. While many did not like what the company has become, others still have fond memories of the place. This is a company that has pioneered the industry in many ways. For a lot of people, Rooster Teeth was their introduction to the internet. They existed before YouTube was even a thing. In fact, in the beginning, they considered YouTube their competitor.

Eventually, they made the switch to YouTube, and it was a big success. In 2014 though, they made what I consider to be their first mistake. Seeing the rise of internet popularity, many media companies wanted in. Fullscreen was one of these companies, and Rooster Teeth sold its business to them. Fullscreen was a multi-network media that is owned by Otter Media which is owned by Warner Bros. Back then, all major movie studios were buying out these multi-network YouTube Businesses because they thought it would be the future.

Disney did the same to Machinima. However, initially, this sale was not a complete disaster. In fact, they grew heavily under Fullscreen. But when there are corporate overlords, the money you are expected to bring in is never enough. It is hard to stay above water when so many people are sharing in the profit. Massive studios like Warner Bros only know one thing, and that is Growth. You need to grow bigger every year. For an internet company like Rooster Teeth, that does not work. Eventually, it just became too much.

The Fall Of Rooster Teeth

However, the company’s problems do go deeper. In 2022 allegations dropped that Rooster Teeth might not be the best working environment for staff. Some serious allegations dropped, highlighting some toxic behavior. Rooster Teeth, to their credit, did not try to hide it and almost admitted to everything. Then again, there was some overwhelming proof, such as text messages. The allegations included a host of things that I cannot include here without the fear of the video being suppressed. Since I already only get ten views per post, I will let you go and google the allegations yourself.

For a company that was already struggling, this was just a further nail in the coffin. In addition, Covid did not help either. All of this brings us to the official announcement of Rooster Teeth’s closure. In a statement, the company said, “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 behavior and monetization across platforms, advertising, and patronage”.

Conclusion

Over the next few weeks, there are going to be theories as to why this company closed its doors. On a personal level, I think they should never have taken the money. The truth is, they did sell out. I don’t judge, as I might have done the same. It was likely life-changing money, and back in 2014, Rooster Teeth probably did not know where an online career was headed yet. It is easy to say all these things now because we know how the story ends. However, if they had trusted themselves, they could still have been around.

There would have been no expectations to bring in millions every year. Instead, maybe your profits would have only been in the low millions or hundred thousand, but it would have all been yours. It is worth saying that all of the bad allegations did not help either. Allegations like that can bring a company to its knees. There are many contributing factors to the fall of Rooster Teeth and all you can do now is try and learn lessons from it.