WEBVTT - The Rooster Teeth Story: The Middle Bits 0:00:04.440 --> 0:00:12.399 Welcome to tech Stuff, a production from iHeartRadio. Hey there, 0:00:12.440 --> 0:00:15.800 and welcome to tech Stuff. I'm your host, Jonathan Strickland. 0:00:15.840 --> 0:00:18.880 I'm an executive producer with iHeart Podcasts and how the 0:00:18.960 --> 0:00:25.280 tech are you? So? In last week's episode about rooster Teeth, 0:00:25.320 --> 0:00:28.560 I talked about the founding of the company and how 0:00:28.640 --> 0:00:31.680 from two thousand and three to twenty fourteen, it would 0:00:31.720 --> 0:00:36.400 both release numerous projects that would shape Internet culture and 0:00:36.640 --> 0:00:40.360 grow as an online focused media company. We covered some 0:00:40.479 --> 0:00:45.560 really early ambitious efforts, like how they launched a crowd 0:00:45.640 --> 0:00:49.680 funding campaign for an independent feature film called Laser Team, 0:00:50.240 --> 0:00:52.599 and how rooster Teeth was the type of company that 0:00:52.640 --> 0:00:56.040 fans would want to work for. They would become fans 0:00:56.040 --> 0:00:58.440 of the company and then say that's who I want 0:00:58.440 --> 0:01:01.080 to end up doing work with, and in fact, some 0:01:01.200 --> 0:01:04.959 fans would be willing to move across borders to become 0:01:05.040 --> 0:01:08.959 part of the team. We ended that episode last week 0:01:09.000 --> 0:01:12.440 by talking about how a different company called full Screen 0:01:12.920 --> 0:01:17.240 would acquire Rooster Teeth for an undisclosed amount of money 0:01:17.319 --> 0:01:19.640 at the end of twenty fourteen. So let's pick up 0:01:19.680 --> 0:01:23.040 there and let's talk about full Screen as well as 0:01:23.080 --> 0:01:26.080 its parent company out our Media and while I was 0:01:26.120 --> 0:01:29.039 working on this episode, it's when I realized that, uh, 0:01:29.080 --> 0:01:31.120 sure enough, I'm actually going to need a third one 0:01:31.160 --> 0:01:33.720 to really cover the important stuff plus the stuff I 0:01:33.720 --> 0:01:37.080 wanted to throw in for various reasons. And part of 0:01:37.120 --> 0:01:39.319 that is because this is a tech podcast. It's not 0:01:39.959 --> 0:01:44.520 just an episode that's kind of exploring rooster teeth and 0:01:44.560 --> 0:01:46.720 what it did and why it was important. It's also 0:01:46.800 --> 0:01:48.640 looking at a lot of this stuff, a lot of 0:01:48.760 --> 0:01:52.360 factors that overlap with rooster teeth, to explain what those 0:01:52.440 --> 0:01:55.320 are and how they work. So I'm kind of using 0:01:55.360 --> 0:01:58.120 this not just as a way to talk about rooster teeth, 0:01:58.200 --> 0:02:01.280 but to talk about important things in general. So let's 0:02:01.320 --> 0:02:04.600 talk about full Screen now. The story of full Screen 0:02:04.680 --> 0:02:08.680 starts with founder George Strombolis, who had worked for YouTube 0:02:08.800 --> 0:02:13.520 as a strategic partnerships manager. YouTube as a platform really 0:02:13.760 --> 0:02:16.760 only has value so long as there are people creating 0:02:16.840 --> 0:02:20.840 compelling content for the platform. That's actually the challenge of 0:02:20.880 --> 0:02:24.919 any platform that relies on user generated content. The stuff 0:02:24.960 --> 0:02:28.040 being posted to the platform. You know, if it's not interesting, 0:02:28.200 --> 0:02:30.360 or if it's not of sufficient quality, well then the 0:02:30.400 --> 0:02:33.120 platform is likely not going to stick around that long. 0:02:33.520 --> 0:02:36.800 So the job of a strategic partnerships manager is in 0:02:36.919 --> 0:02:42.760 part to identify and secure and maintain and grow relationships 0:02:42.840 --> 0:02:47.520 with various content partners. The content creators will find a 0:02:47.520 --> 0:02:51.080 way to monetize their work, and they'll learn strategies to 0:02:51.200 --> 0:02:54.919 maximize their efforts so that they're not wasting their time 0:02:55.080 --> 0:02:58.720 and money and energy on things that aren't going to work. 0:02:58.960 --> 0:03:01.840 They can also find other people to collaborate with all 0:03:01.880 --> 0:03:04.560 this kind of stuff. That's sort of the benefit they see. 0:03:04.639 --> 0:03:08.320 And meanwhile, YouTube gets content that users want to watch. 0:03:08.960 --> 0:03:11.560 At least that's the idea. And of course YouTube gets 0:03:11.840 --> 0:03:15.040 a significant cut, like around thirty percent of the ad 0:03:15.080 --> 0:03:19.560 revenue that content creators bring in. So YouTube has an 0:03:19.600 --> 0:03:25.280 incentive to encourage successful channels, and channels have an incentive 0:03:25.400 --> 0:03:29.840 to work with strategic partners in order to maximize the 0:03:29.919 --> 0:03:33.320 return on the investment they have made in creating their content. 0:03:33.919 --> 0:03:37.880 Now let's talk about multichannel networks. These are third party 0:03:38.000 --> 0:03:42.520 organizations that fulfill a similar purpose to a strategic partner 0:03:42.840 --> 0:03:47.480 over at YouTube. So a strategic partnership manager actually works 0:03:47.560 --> 0:03:52.880 for YouTube, whereas multichannel networks are independent third party organizations 0:03:52.920 --> 0:03:58.200 typically and they curate content, they recruit content creators to 0:03:58.280 --> 0:04:01.760 have their channels join this network. Those channels may not 0:04:02.400 --> 0:04:05.760 overtly explain that they're part of the network. They might 0:04:05.760 --> 0:04:08.240 not have a logo or anything that shows this. Maybe 0:04:08.240 --> 0:04:10.640 they have a little bit in the about section, but 0:04:10.720 --> 0:04:15.080 otherwise it's not necessarily obvious. The networks end up making 0:04:15.120 --> 0:04:17.880 revenue by taking a percentage of those ad sales that 0:04:18.000 --> 0:04:21.039 member channels generate, similar to the way YouTube does. This 0:04:21.240 --> 0:04:24.640 means a multi channel network only makes money if the 0:04:24.760 --> 0:04:28.320 channels in that network are also making money. So it's 0:04:28.360 --> 0:04:31.040 sort of like a talent agent. It gets a percentage 0:04:31.040 --> 0:04:34.440 of a creator's pay when they land a gig. You know. Now. 0:04:34.480 --> 0:04:38.520 In return, the channels get support from the network. At 0:04:38.600 --> 0:04:42.880 least that's what's supposed to happen. The network provides publicity, 0:04:43.000 --> 0:04:47.279 they might provide strategy and advice, They might provide collaboration 0:04:47.360 --> 0:04:51.600 opportunities with other members of the network, and perhaps most importantly, 0:04:51.839 --> 0:04:54.520 they provide a sense of stability in an industry that's 0:04:54.880 --> 0:04:58.159 unpredictable to say the least. So Strombolis decided to found 0:04:58.400 --> 0:05:01.120 full Screen in twenty eleven and as a company that 0:05:01.120 --> 0:05:04.640 would help content creators reach the next level on YouTube. 0:05:04.920 --> 0:05:07.680 Full Screen was sort of a multi channel network that 0:05:07.720 --> 0:05:11.320 worked with tons of creators. The idea was that full 0:05:11.360 --> 0:05:14.239 Screen would benefit from working with a large number of channels, 0:05:14.240 --> 0:05:16.840 and the channels would benefit from better promotion on YouTube. 0:05:16.920 --> 0:05:19.839 We're already back in twenty eleven it was getting harder 0:05:19.839 --> 0:05:22.480 and harder to stand out in a really crowded field, 0:05:22.480 --> 0:05:25.280 and as you can imagine, that challenge has only grown 0:05:25.440 --> 0:05:29.599 more over the time, like it's today. Being able to 0:05:30.000 --> 0:05:34.880 stand out in YouTube seems like it's an overwhelming challenge. 0:05:35.000 --> 0:05:38.240 Folks can end up getting promoted, it seems almost at 0:05:38.320 --> 0:05:42.040 random by the recommendation engine, but it's really hard to 0:05:42.160 --> 0:05:45.719 purposefully stand out all on your own. It can be done, 0:05:46.000 --> 0:05:48.840 but it's hard to do so. Full Screen ends up 0:05:49.120 --> 0:05:53.160 racking up this huge list of content partners. In fact, 0:05:53.160 --> 0:05:56.279 according to AT and t's website, full Screen worked with 0:05:56.480 --> 0:06:00.200 quote more than fifty thousand content creators who in h 0:06:00.279 --> 0:06:05.080 four hundred and fifty million subscribers and generate four billion 0:06:05.480 --> 0:06:10.400 with a B monthly views end quote. The billion with 0:06:10.440 --> 0:06:14.880 a B was me Beyond that, Strompolis fell into a 0:06:15.000 --> 0:06:18.360 camp of streaming video execs who saw the potential of 0:06:18.440 --> 0:06:22.440 media behind a paywall. Be it a subscription service or 0:06:22.640 --> 0:06:25.960 you know, pay to access this particular video or what 0:06:26.080 --> 0:06:30.159 have you. Meanwhile, we actually have to talk about another entity. 0:06:30.640 --> 0:06:33.480 This one is called Otter Media. And to talk about 0:06:33.560 --> 0:06:38.440 Otter Media, actually we have to talk about anime distribution. Specifically, 0:06:38.520 --> 0:06:41.120 we have to talk about crunchy roll. Because this all 0:06:41.160 --> 0:06:45.400 gets really complicated and jumbled, but it is important. So 0:06:45.960 --> 0:06:49.080 back in two thousand and six, there were some college 0:06:49.120 --> 0:06:51.840 buddies who had recently graduated, and they were thinking about 0:06:51.839 --> 0:06:54.919 how hard it was to get access to anime in 0:06:54.960 --> 0:06:57.280 the United States. You really had to put the work 0:06:57.279 --> 0:07:00.560 in to find anime, and only a few times had 0:07:00.600 --> 0:07:05.159 really broken through to find general distribution in America. And 0:07:05.240 --> 0:07:09.479 even then the anime you found might not be subtitled 0:07:09.680 --> 0:07:12.720 or dubbed into English, which meant even if you could 0:07:12.880 --> 0:07:17.400 access the anime, it wasn't really accessible unless you were 0:07:17.400 --> 0:07:20.920 fluent in Japanese. So they put together a website that 0:07:21.120 --> 0:07:26.080 celebrated anime, and by celebrate, I mean the celebration included 0:07:26.200 --> 0:07:31.960 hosting pirated versions of anime with fan subbed subtitles. That 0:07:32.080 --> 0:07:37.320 means these were versions of anime that fans themselves had 0:07:37.560 --> 0:07:40.720 subtitled in order to make the successible to non Japanese 0:07:40.760 --> 0:07:46.480 speaking audiences. They called this service Crunchy Role. Now, the 0:07:46.560 --> 0:07:50.880 piracy thing meant that anime studios and their corporate overlords 0:07:50.920 --> 0:07:54.920 weren't terribly keen about Crunchy Role. When the small business 0:07:54.960 --> 0:07:58.480 received a significant investment to the tune of four million dollars, 0:07:58.840 --> 0:08:02.760 there was a concerted effort for Crunchy Role to go legit. 0:08:02.960 --> 0:08:06.680 So instead of featuring pirated material, Crunchy Role would try 0:08:06.720 --> 0:08:11.160 to secure licensing to feature various anime films and series. 0:08:11.520 --> 0:08:15.080 This was much more amenable to those various studios and 0:08:15.080 --> 0:08:19.200 aforementioned corporate overlords. So then fast forward to twenty thirteen, 0:08:19.280 --> 0:08:22.960 a company called the Chernin Group comes into play. Now, 0:08:23.000 --> 0:08:27.120 the Chernin Group is a media investment company, as in, 0:08:27.160 --> 0:08:32.120 this is a company that invests in quote media, entertainment, technology, sports, 0:08:32.120 --> 0:08:35.680 and consumer and digital media sectors end quote. It was 0:08:35.720 --> 0:08:39.000 founded by a former news Core executive named Peter Chernan, 0:08:39.080 --> 0:08:42.679 thus the Churnin Group, and in twenty thirteen it acquired 0:08:42.720 --> 0:08:47.360 a majority stake in Crunchy Role. Meanwhile, AT and T, 0:08:47.800 --> 0:08:51.959 the telecommunications company, was looking to branch out into media. 0:08:52.280 --> 0:08:55.680 It wouldn't just provide the wires that brought you the content, 0:08:56.000 --> 0:08:59.520 it would provide some of the content running across those wires. 0:09:00.000 --> 0:09:04.560 Other telecommunications companies were doing similar things, notably Comcast, which 0:09:04.679 --> 0:09:08.440 eventually becomes part of NBC Universal, or rather it becomes 0:09:08.440 --> 0:09:12.400 the owner of NBC Universal. So in twenty fourteen, AT 0:09:12.520 --> 0:09:15.640 and T forms a partnership with the Churnin Group, and 0:09:15.679 --> 0:09:18.760 these two companies together create a joint venture and they 0:09:18.800 --> 0:09:22.600 call it Outer Media. Each company, AT and T and 0:09:22.679 --> 0:09:26.880 Churnin Group would retain a fifty percent stake in Automedia, 0:09:27.160 --> 0:09:29.680 so Automedia would act as a kind of holding company 0:09:29.720 --> 0:09:32.160 in One of the things it held was Crunchy Role. 0:09:32.559 --> 0:09:35.840 Shortly after launch, Automedia was taking a good hard look 0:09:35.880 --> 0:09:39.360 at the market to determine what other properties to scoop 0:09:39.440 --> 0:09:42.520 up besides Crunchy Role, and it set its sites on 0:09:42.600 --> 0:09:46.920 full Screen, so Automedia would secure controlling interest in full Screen, 0:09:47.160 --> 0:09:50.680 though George Strompolis would manage to continue to run the 0:09:50.720 --> 0:09:54.360 company as CEO, and other investors would maintain a stake 0:09:54.559 --> 0:09:58.880 in full Screen as well, so it wasn't a full takeover. 0:09:59.000 --> 0:10:02.600 And that wasn't like they everybody. They were kind of 0:10:02.640 --> 0:10:05.480 trying to keep things as independent as possible so that 0:10:05.520 --> 0:10:09.800 Strompolis wouldn't be interfered with too much. Now, a lot 0:10:09.880 --> 0:10:12.880 was going on at this time. Traditional media companies and 0:10:12.920 --> 0:10:16.280 by that I mostly mean television studios and cable networks 0:10:16.440 --> 0:10:18.480 were all trying to figure out how to get into 0:10:18.559 --> 0:10:21.440 the digital scene. It turned out that the stuff that 0:10:21.480 --> 0:10:25.720 worked in conventional television didn't necessarily apply to the online world. 0:10:25.760 --> 0:10:29.640 You couldn't just port a TV network mentality to YouTube. 0:10:29.840 --> 0:10:33.679 For example. The online world allowed for a tighter focus 0:10:33.720 --> 0:10:37.360 on niche interests, and in the cable world things might 0:10:37.440 --> 0:10:40.080 start off that way, but over time they would change. 0:10:40.120 --> 0:10:42.400 And for more evidence of that, you can just look 0:10:42.440 --> 0:10:45.280 at what happened to channels that started off with a 0:10:45.400 --> 0:10:49.080 really tight focus, like the sci Fi Network originally was 0:10:49.200 --> 0:10:52.360 really a science fiction network. Over time it became less so, 0:10:52.720 --> 0:10:56.520 or cartoon network even or A great example is MTV, 0:10:56.720 --> 0:11:01.960 which when it first started was almost exclusively music videos. Gradually, 0:11:02.360 --> 0:11:05.240 content that doesn't quite fit the mission of the original 0:11:05.640 --> 0:11:08.600 channel concept starts to creep in in the cable world, 0:11:08.640 --> 0:11:11.559 and eventually all the cable channels kind of become general 0:11:11.600 --> 0:11:14.800 purpose rather than a channel that centered on a specific 0:11:14.920 --> 0:11:19.520 topic or interest. But online that doesn't necessarily happen. The 0:11:19.600 --> 0:11:23.640 hyper focused channels can maintain that focus and cater to 0:11:23.800 --> 0:11:27.920 a specific audience while still experiencing wild success. This was 0:11:27.960 --> 0:11:30.360 also in an era that bleeds into the pivot to 0:11:30.480 --> 0:11:33.040 video scandal, which I talked about in a recent tech 0:11:33.040 --> 0:11:36.040 Stuff episode, So as a reminder, pivot to video was 0:11:36.080 --> 0:11:40.680 a concept that spawned largely because of Facebook. Facebook famously 0:11:40.720 --> 0:11:43.880 stated that video content drove far more engagement on the 0:11:43.920 --> 0:11:48.000 platform than it really did, and as a result, Facebook 0:11:48.040 --> 0:11:51.000 would put a lot more focus in support behind posts 0:11:51.040 --> 0:11:55.760 that contained video content, particularly video content that was posted 0:11:56.040 --> 0:11:59.360 directly to Facebook as opposed to video content that was 0:11:59.400 --> 0:12:02.520 hosted on an external site and then linked on Facebook. 0:12:02.920 --> 0:12:07.720 That movement would ultimately decimate writer's rooms across content sites 0:12:07.800 --> 0:12:10.400 all over the web, but it did mean that companies 0:12:10.440 --> 0:12:13.360 that focused on video production were in a pretty darn 0:12:13.400 --> 0:12:16.440 sweet spot as far as the market was concerned, at 0:12:16.559 --> 0:12:20.000 least for the short term. So anyway, Autermedia acquires a 0:12:20.040 --> 0:12:23.720 majority stake in full Screen, and Autteromedia in turn has 0:12:23.760 --> 0:12:26.800 the churnin group in at and T as Mommy and Daddy. 0:12:27.160 --> 0:12:29.839 That's a lot, but don't worry, it'll get a lot 0:12:29.880 --> 0:12:32.760 more complicated as we go on. However, it was full 0:12:32.800 --> 0:12:35.920 Screen in twenty fourteen that makes the offer to acquire 0:12:36.000 --> 0:12:39.800 rooster Teeth, and the company accepted that offer. So why 0:12:39.800 --> 0:12:43.160 did full Screen go after rooster Teeth well as deadlines? 0:12:43.240 --> 0:12:46.320 David Bloom put it in a twenty fourteen article titled 0:12:46.520 --> 0:12:50.800 full Screen buys online video pioneer Rooster Teeth. Rooster Teeth 0:12:50.800 --> 0:12:53.160 had proven itself to be an early success story with 0:12:53.240 --> 0:12:56.280 regards to subscription models. You know, the company originally called 0:12:56.320 --> 0:13:00.360 them sponsorships and later called them first memberships. They also 0:13:00.400 --> 0:13:03.600 were a success with merchandise and live events. All of 0:13:03.640 --> 0:13:08.520 these things are potentially revenue generating enterprises. It was clear 0:13:08.679 --> 0:13:10.640 that online delivery was going to be the future of 0:13:10.760 --> 0:13:14.160 content distribution. There was no denying there was a shift 0:13:14.480 --> 0:13:17.000 as there were more and more cable cutters and those 0:13:17.000 --> 0:13:20.240 who would never become cable subscribers to start with. Heck, 0:13:20.480 --> 0:13:24.000 full Screen itself was part of that online distribution world. 0:13:24.360 --> 0:13:27.520 Rooster Teeth had found a way to foster a community 0:13:27.880 --> 0:13:31.640 and cater to that community in a way that was profitable. 0:13:31.960 --> 0:13:34.679 That's something that a lot of other content creators hadn't 0:13:34.800 --> 0:13:38.600 quite figured out yet. For example, Rooster Tee's subscription model 0:13:38.640 --> 0:13:41.079 had proven to be popular, so in the earliest days, 0:13:41.120 --> 0:13:44.440 the subscription or sponsorship was twenty dollars for a single 0:13:44.480 --> 0:13:48.520 season of their flagship show Red Versus Blue. At the 0:13:48.600 --> 0:13:51.040 end of the first season, Rooster Teeth sent out DVDs 0:13:51.080 --> 0:13:54.440 of the episodes that contained things like commentary tracks and 0:13:54.480 --> 0:13:58.439 bonus material to all the sponsors. Some folks would actually 0:13:58.480 --> 0:14:01.840 contribute far more than the twenty dollars. In an interview 0:14:01.920 --> 0:14:05.200 on the Recode podcast, co founder Bernie Burns said that 0:14:05.360 --> 0:14:08.720 one supporter sent five hundred bucks and they contacted him 0:14:08.760 --> 0:14:10.200 to find out if this had been an error, but 0:14:10.240 --> 0:14:12.880 the fan said no, no, it was intentional. So Burns's 0:14:12.920 --> 0:14:15.800 conclusion was that people liked to support the stuff they like, 0:14:16.080 --> 0:14:18.880 and that this support meant that the company could actually 0:14:18.880 --> 0:14:23.760 stay afloat despite hefty expenses like file hosting and bandwidth fees, 0:14:23.840 --> 0:14:28.240 because remember, they're hosting all these video files themselves, and 0:14:28.320 --> 0:14:32.320 people are downloading each episode over the internet and then 0:14:32.400 --> 0:14:35.600 watching them at home, So they had to find a 0:14:35.600 --> 0:14:38.000 way to be able to support this because the bill 0:14:38.520 --> 0:14:40.880 for those bandwidth fees would be in the tens of 0:14:40.920 --> 0:14:44.760 thousands of dollars. Sometimes so over time, this subscription would 0:14:44.800 --> 0:14:47.440 change to a monthly fee, and in return for which 0:14:47.480 --> 0:14:50.760 subscribers who are now called first members, would get early 0:14:50.800 --> 0:14:54.720 access to some content, exclusive access to other content, and 0:14:54.760 --> 0:14:57.640 depending upon the level of membership, they sometimes would receive 0:14:57.680 --> 0:15:01.640 physical merchandise as well, including exclusive items that were just 0:15:01.680 --> 0:15:05.320 made for members. And the model totally worked, which showed 0:15:05.400 --> 0:15:08.720 rooster Teeth had a savvy handle on how to do 0:15:08.760 --> 0:15:11.520 business in online media, despite the fact that the co 0:15:11.640 --> 0:15:15.520 founders didn't come from a business background. Okay, we're going 0:15:15.600 --> 0:15:18.120 to take a quick pause in our history to thank 0:15:18.160 --> 0:15:30.520 our sponsors, but we'll be right back. Before the break, 0:15:30.800 --> 0:15:33.880 I was talking about how rooster Teeth had managed to 0:15:34.320 --> 0:15:38.040 find a model that allowed them to be very self sufficient. 0:15:38.400 --> 0:15:40.720 A huge part of this was how the company had 0:15:40.760 --> 0:15:43.680 put in a ton of work to encourage their audience 0:15:43.720 --> 0:15:47.280 to become a community. You never hear them talking about 0:15:47.440 --> 0:15:50.040 audiences or very rarely, they almost always use the word 0:15:50.040 --> 0:15:54.160 community instead. So the rooster Teeth website hosted message boards 0:15:54.360 --> 0:15:57.760 where fans could congregate and discuss all sorts of topics. 0:15:57.960 --> 0:15:59.760 Some of the folks who worked at rooster Teeth actually 0:15:59.760 --> 0:16:03.320 got the start as community members on those forums, the 0:16:03.360 --> 0:16:07.440 folks at the company would dip into those conversations, and 0:16:07.440 --> 0:16:11.160 that further strengthened this communal bond. I could probably go 0:16:11.240 --> 0:16:14.120 off on a tangent about parasocial relationships because a lot 0:16:14.120 --> 0:16:16.560 of that was happening too. We'll actually have to talk 0:16:16.600 --> 0:16:19.520 about that in the next episode, but we're gonna move on. 0:16:19.960 --> 0:16:23.360 So the article I had mentioned earlier also quotes George 0:16:23.360 --> 0:16:26.280 Strompolis as saying, quote, rooster Teeth is one of the 0:16:26.280 --> 0:16:29.520 strongest and most authentic media brands in the world amongst 0:16:29.560 --> 0:16:33.480 eighteen to thirty four year old male skewing audiences. The 0:16:33.520 --> 0:16:37.960 combination of its massive reach, unique creative voice, and insanely 0:16:38.080 --> 0:16:40.880 powerful community makes it a perfect match for full Screen 0:16:41.200 --> 0:16:44.320 end quote. Okay, but what about rooster Teeth, why did 0:16:44.360 --> 0:16:48.520 the company agree to this acquisition? Well, according to Bernie Burns, 0:16:48.560 --> 0:16:51.720 who was also quoted in that same article, quote, at 0:16:51.800 --> 0:16:53.880 Rooster Teeth, we have a long history of creating the 0:16:53.920 --> 0:16:57.200 best digital content in the industry. With full Screen, we 0:16:57.280 --> 0:16:59.920 look forward to continuing that tradition in even bigger and 0:17:00.120 --> 0:17:03.560 better ways. Matt and I are excited about the opportunities 0:17:03.560 --> 0:17:06.280 this alliance will present for our creators and all the 0:17:06.320 --> 0:17:09.520 amazing content it will empower them to produce for our audience. 0:17:09.800 --> 0:17:12.399 End quote. Now, the Matt that Bernie mentions in that 0:17:12.600 --> 0:17:15.359 is Matt Hullum, another co founder and at that time 0:17:15.440 --> 0:17:18.960 the CEO of Rooster Teeth. Bernie served as the creative 0:17:18.960 --> 0:17:21.760 director for the company at that time. Both would continue 0:17:21.800 --> 0:17:25.000 to operate in those roles post acquisition, at least for 0:17:25.240 --> 0:17:28.800 the near future. Now, I suspect that one other reason 0:17:28.840 --> 0:17:31.320 that they agreed to this acquisition is the big ol' 0:17:31.400 --> 0:17:35.240 honk and check that they presumably received for this transaction. Again, 0:17:35.520 --> 0:17:37.560 it was never made public how much this was for, 0:17:37.800 --> 0:17:41.040 and Bernie would actually say on that Recode podcast. I 0:17:41.040 --> 0:17:44.320 mentioned earlier that he had enough money to retire, but 0:17:44.359 --> 0:17:46.119 then he pointed out that if he did retire, it 0:17:46.160 --> 0:17:47.840 would just be so that he could do what he 0:17:47.880 --> 0:17:50.520 was already doing at Rooster Teeth. So I'm sure the 0:17:50.600 --> 0:17:55.040 money definitely helped with the decision making process. Rooster Teeth 0:17:55.080 --> 0:17:58.040 was in an interesting position with regard to online media. 0:17:58.119 --> 0:18:01.320 For the first several years of the company existence, they 0:18:01.359 --> 0:18:04.200 hosted all their own content right I mentioned this earlier. 0:18:04.240 --> 0:18:06.920 They didn't jump onto YouTube right away, and in fact, 0:18:07.000 --> 0:18:09.639 YouTube didn't launch until two thousand and five. And remember 0:18:09.760 --> 0:18:12.760 rooster Teeth launched in two thousand and three. So again 0:18:12.800 --> 0:18:14.359 in the earliest days, he would actually have to go 0:18:14.400 --> 0:18:16.679 to the rooster Teeth site. They would have a link 0:18:17.000 --> 0:18:20.200 to the media files that were for each episode. You 0:18:20.200 --> 0:18:23.280 would download the file, you'd watch it on your computer locally. Now, 0:18:23.280 --> 0:18:26.560 according to Burns, rooster Teeth held off on YouTube until 0:18:26.560 --> 0:18:28.960 two thousand and eight or two thousand and nine before 0:18:29.000 --> 0:18:31.960 dipping a toe in, So even when YouTube became a thing, 0:18:32.440 --> 0:18:35.040 rooster Teeth was not immediately on board. Now, part of 0:18:35.080 --> 0:18:37.399 the concern was that early on with YouTube, there was 0:18:37.440 --> 0:18:40.359 no way to monetize videos on the platform and it 0:18:40.359 --> 0:18:43.360 would take some time for that to happen. Google would 0:18:43.400 --> 0:18:46.960 acquire YouTube and then eventually would put into place a 0:18:47.080 --> 0:18:50.480 partner program, And there was also a fear that if 0:18:50.480 --> 0:18:53.280 they did put stuff up on YouTube, it would cannibalize 0:18:53.320 --> 0:18:56.960 traffic from rooster Teeth itself. Burns said on that Recode 0:18:57.000 --> 0:19:01.000 podcast quote, people who were on YouTube and leave YouTube, 0:19:01.119 --> 0:19:03.720 they didn't click away to go to anything else. In 0:19:03.840 --> 0:19:06.200 the quote. Now, seeing as how rooster t that really 0:19:06.240 --> 0:19:09.680 wanted to encourage people to become subscribers or members, as 0:19:09.680 --> 0:19:12.840 well as to encourage merchandise sales. You can understand that 0:19:12.880 --> 0:19:15.439 there was a reluctance to share videos on a different 0:19:15.520 --> 0:19:18.200 site because it's very hard to get folks to leave 0:19:18.280 --> 0:19:20.919 one site and go to another to do something like 0:19:21.040 --> 0:19:24.600 make a purchase. YouTube has a very strong incentive to 0:19:24.680 --> 0:19:27.840 keep people on YouTube for as long as it possibly can, 0:19:28.000 --> 0:19:30.200 So if you did jump on YouTube and you hope 0:19:30.200 --> 0:19:31.800 to get people to come to your site, you actually 0:19:31.840 --> 0:19:35.119 have two organizations that have conflicting goals, and that's just 0:19:35.240 --> 0:19:38.600 not easy to overcome. It's a similar problem content creators 0:19:38.640 --> 0:19:41.560 would run into with social media sites like Facebook when 0:19:41.560 --> 0:19:43.600 they changed the game. You would get a lot more 0:19:43.600 --> 0:19:47.960 engagement if you uploaded your content directly to the platform itself, 0:19:48.160 --> 0:19:50.919 as opposed to posting a link to your content, but 0:19:51.000 --> 0:19:52.879 that meant all the traffic was going in and out 0:19:52.920 --> 0:19:55.879 of the social media site, not your site. So you 0:19:55.920 --> 0:19:58.320 have to weigh the benefits of getting more eyeballs on 0:19:58.359 --> 0:20:01.480 your content by posting where a lot of people are congregating, 0:20:01.720 --> 0:20:05.400 such as YouTube, versus hosting everything yourself, getting the most 0:20:05.400 --> 0:20:09.720 benefit of each individual user, but perhaps having far fewer 0:20:09.840 --> 0:20:14.040 users overall. Ultimately, rooster Teeth would choose to host some 0:20:14.160 --> 0:20:17.080 of its content on YouTube as well as its own site, 0:20:17.359 --> 0:20:19.919 but Burns stress that it was always important to maintain 0:20:19.960 --> 0:20:23.120 your own base of operations because you have no control 0:20:23.240 --> 0:20:26.720 over a third party site like YouTube, and when YouTube 0:20:26.720 --> 0:20:30.080 makes a change, say to its recommendation algorithm or to 0:20:30.400 --> 0:20:34.320 its advertising policy, well that affects you, and there's not 0:20:34.480 --> 0:20:37.080 really much you can do other than try to adapt 0:20:37.280 --> 0:20:39.920 to the changes. On your own site, you have far 0:20:40.000 --> 0:20:43.000 more control. So roster Teeth was living in both worlds, 0:20:43.000 --> 0:20:45.719 and there would be times when Rooster Teeth would actually 0:20:45.800 --> 0:20:48.960 pull or set to private some of the videos that 0:20:49.040 --> 0:20:51.960 previously were publicly viewable on YouTube. So not all the 0:20:52.000 --> 0:20:55.280 stuff that rooster Teeth has uploaded to YouTube is still 0:20:55.320 --> 0:20:59.560 there or still available today. The full Screen acquisition marked 0:20:59.600 --> 0:21:02.840 a big change for rooster Teeth. Now it was neither 0:21:03.000 --> 0:21:07.440 completely positive or negative. Recently, at least at the time 0:21:07.480 --> 0:21:10.359 of the recording of this podcast, the Rooster Teeth staff 0:21:10.400 --> 0:21:13.399 appeared during a really emotional live stream. This happened a 0:21:13.480 --> 0:21:17.000 day after the announcement that Warner Brothers Discovery was shutting 0:21:17.040 --> 0:21:20.560 down rooster Teeth. They gathered to talk about their experiences 0:21:20.600 --> 0:21:22.960 working at this company as well as with each other, 0:21:23.119 --> 0:21:25.840 and also to share what information they had about what 0:21:25.960 --> 0:21:28.600 comes next. We'll talk about what comes next in our 0:21:28.640 --> 0:21:31.840 next episode. There were a lot of tears in that 0:21:31.880 --> 0:21:34.119 live stream, y'all. You can check it out. It's up 0:21:34.160 --> 0:21:36.520 on YouTube. But one moment that really stood out to 0:21:36.560 --> 0:21:40.160 me was one in which Rooster Teeth employee Chelsea Atkinson 0:21:40.560 --> 0:21:44.000 lamented the full Screen acquisition and talked about how many 0:21:44.000 --> 0:21:48.160 folks were upset at the time. They were essentially saying, 0:21:48.200 --> 0:21:51.679 how could you sell this company? A lot of her 0:21:51.720 --> 0:21:55.320 colleagues appeared to share her feelings about this. The effects 0:21:55.359 --> 0:21:57.920 of that sale would actually take some time to really 0:21:57.960 --> 0:22:00.399 shake out, apart from the fact that the state holders 0:22:00.400 --> 0:22:02.680 at Rooster Teeth got a hefty check for their acquisition. 0:22:03.119 --> 0:22:05.199 So we're going to continue on our journey as the 0:22:05.200 --> 0:22:07.439 company would launch more projects, and again I'm not going 0:22:07.520 --> 0:22:10.600 to list everything because that would be exhausting and also 0:22:10.600 --> 0:22:15.240 wouldn't be very interesting. Now. Like twenty fourteen, twenty fifteen 0:22:15.280 --> 0:22:18.399 would be another really big year for Rooster Teeth for 0:22:18.440 --> 0:22:22.639 both good and bad reasons. The company would launch several 0:22:22.680 --> 0:22:26.040 new series, ranging from more comedy shows to a sports 0:22:26.080 --> 0:22:31.040 related show to documentaries. Their first feature film, Laser Team, 0:22:31.040 --> 0:22:33.920 would premiere in twenty fifteen, so this was a big 0:22:34.000 --> 0:22:37.520 year and also as a mark of that strategy that 0:22:37.600 --> 0:22:40.960 they were forming with YouTube, Rooster Teeth's film, Laser Team 0:22:40.960 --> 0:22:44.840 would actually become a launch title for YouTube's subscription service 0:22:44.880 --> 0:22:49.439 called YouTube Bread. YouTube was looking for special content to 0:22:49.600 --> 0:22:52.719 acquire for this launch in order to attract people to 0:22:52.840 --> 0:22:55.640 subscribe to YouTube Bread. Laser Team was one of those 0:22:55.680 --> 0:22:58.840 pieces of content, so the movie would become available on 0:22:59.280 --> 0:23:03.840 YouTube Bread for subscribers shortly after it had its cinematic debut. 0:23:03.960 --> 0:23:05.760 So this was one of those cases where you have 0:23:05.800 --> 0:23:09.120 a film that almost simultaneously comes out in theaters and 0:23:09.200 --> 0:23:12.280 on streaming. Is a fairly early example of that, not 0:23:12.359 --> 0:23:14.880 the first one, but an early one. The company also 0:23:14.960 --> 0:23:17.960 saw lots of new hires in twenty fifteen. It was 0:23:18.040 --> 0:23:20.480 on its way to growing into a much larger company. 0:23:20.800 --> 0:23:23.320 It had taken years for Rooster Teeth to get to 0:23:23.480 --> 0:23:26.600