Month: April 2023

Thanks to its original animated series such as “Red vs. Blue” and “RWBY,” as well as a popular podcast and series of “Let’s Play” videos, the company has accrued tens of millions of followers and over 6 billion views across several social media and video channels. That’s more than luminary esports organizations such as FaZe Clan and 100 Thieves, against whom Rooster Teeth has increasingly compared itself over the past year. Rooster Teeth’s most popular video, a fake trailer for a movie based on “Angry Birds,” has racked up over 26 million views alone.

As of last week, Rooster Teeth is undergoing a rebrand, replete with a new logo and tagline — ”Just Playing” — intended to inject a dose of much-needed cohesion into the many sub-brands that constitute Rooster Teeth in 2023, including “RWBY,” “Red vs. Blue” and “Achievement Hunter.”

“For people who are coming in fresh, it’s hard to connect the dots — like, what’s the relationship between those brands and Rooster Teeth,” said Rooster Teeth head of marketing Adam Bersin, who joined the company in March 2022. “We needed to create those synergies, whether it was from a design standpoint, or just the values that we were expressing.”

Rebrand or not, the last few years have not been kind to Rooster Teeth. From 2019 onward, current and former employees of the company have spoken out about its poor work conditions and insufficient pay, accusing Rooster teeth leaders of creating a sexist, racist and homophobic work environment.

At the same time, ownership of Rooster Teeth changed hands multiple times — first via an acquisition by the media company Fullscreen, which became part of AT&T’s Otter Media, which was absorbed by current Rooster Teeth owner Warner Bros. Discovery in April 2022. (Requests for comment from Warner Bros. Discovery were channeled back to Rooster Teeth PR.)

Things came to a head in October 2022, when former Rooster Teeth producer Kdin Jenzen revealed that her nickname at the company had been a homophobic slur. Rooster Teeth management responded by issuing multiple apology statements and temporarily limiting the company’s content output.

Following the controversies in 2020, Rooster Teeth, in 2021, it created internal business resource groups for employees of marginalized identities, including Black Excellence, a group for Black employees, Gallos Unidos, a group for Latino employees and a queer/LGBTQ+ resource group. And in 2022, it entirely replaced its human resources team and executive management, promised to “honor our agreements and address any outstanding payments” and implemented management training to avoid future blow-ups.

Rooster Teeth’s five-part business strategy relies on a mix of ads, subscriptions, licensed content, events and merchandise to generate revenue. Following the initial burst of controversy in 2019, Bloomberg reported that the company’s revenue had dropped by nearly $20 million. Rooster Teeth’s numbers reportedly bounced back in 2021, when the company announced at that year’s Fall IAB Podcast Upfront that its revenues had quadrupled over the 12 months — though it did not share a specific figure.

And Rooster Teeth has continued to grow, despite the controversy. It currently boasts over one million monthly active visitors and over 45 million subscribers, as well as advertisers including HelloFresh and Honey, according to figures shared by Rooster Teeth.

The rebrand was already in the works before the October 2022 scandals, according to Bersin, who said it was primarily motivated by Rooster Teeth’s 20th anniversary on April 1, 2023. Rooster Teeth representatives said that the rebrand initiative has been in the works for years, and that it is not a sign that the media company is running from its past.

“It’s yes and no,” Bersin said when asked whether the rebrand was intended to consciously address the controversies. “Conscious in the sense that the rebrand was more about just us trying to really figure out what we want the next 20 years to be, versus us trying to react necessarily to the space itself. And don’t get me wrong — we’re trying to change a lot of things.”

For Rooster Teeth, pegging the rebrand to an anniversary is more likely to succeed than a rebrand explicitly attached to scandals, according to experts. 

“I would never advise anyone to think of a rebrand as a distraction tactic,” said Mario Natarelli, a managing partner at the marketing and branding agency MBLM. “If the motivation is around steering the conversation, that’s the worst sort of foundation for a rebrand — but at least in terms of a brand moving into its 20th year, looking to mature and evolve what it stands for, I think that’s fair, to some extent.”

Rooster Teeth is making a conscious effort to change for the better — but for many longtime fans of the brand, it might simply be too late. The rebrand was preceded by years of controversy, and those feelings continue to resonate through the Rooster Teeth fandom.

“I think a lot of these business people don’t realize that fans are observing this,” said Lily Herman, a podcaster and lifelong Rooster Teeth fan. “As a fan, you’re very aware of who owns the company, and what that means for its actual business strategy.” 

On the subject of fans, engagement with individual pieces of Rooster Teeth content appears to have fallen off significantly since the heyday of the media company, despite the overall growth of its numbers. A glance at the Rooster Teeth YouTube channel, which once regularly enjoyed millions of views on every upload, shows that new uploads struggle to consistently reach the 50,000 view mark.

And Rooster Teeth fans have taken notice of the drop-off, posting threads with titles like “where did everyone go” on the official Rooster Teeth subreddit. Most of the replies placed the blame squarely on the company’s recent brushes with controversy.

“Sometimes the drama is what surfaces, first and foremost, [and] is a lot more engaging in some ways than statements about what we’re doing [to improve],” said Rooster Teeth general manager Jordan Levin, who has served as the company’s senior executive since joining Rooster Teeth in September 2019.

For Rooster Teeth to bring back the fans it has lost, it must continue to communicate to its former fan base that it has taken significant steps to right the wrongs of past years. So far, many Rooster Teeth fans haven’t gotten that message.

“I don’t think that the end of Rooster Teeth is nigh,” Herman said, “But for all intents and purposes, Rooster Teeth is over as we knew it — it is a different brand.”

Amid all the fracas, Twitch is also losing what was once arguably its most valuable asset: its role as a central hub for the streaming community. As Twitch grew massively during the COVID pandemic, it invested more resources into its ad offerings and fewer into community-building, and streamers have begun to feel like they have less of a voice as Twitch grows its business.

Where once there was a Twitch community, there are now multitudes of disparate streamer communities. And while creators have the opportunity to diversify their content channels (and monetize them), it’s creating an opening for rival platforms such as YouTube and Kick to gain market share, according to streamers, talent managers and former Twitch staffers, including three members of the platform’s founding team.

Twitch reps declined to comment on the specific details in this article, but shared a quote from Twitch’s new CEO Dan Clancy complimenting the tenure of his predecessor, Emmett Shear.

Growing pains

The recent tumult at Twitch HQ comes after a year of growing pains for the platform. 

As Twitch scaled up in 2021 and 2022 due to unprecedented COVID-fueled growth, creators took issue with company changes: including a new revenue share with top streamers from 70/30 to a less favorable 50/50 split and the platform’s response to targeted attacks against women and minority streamers by waves of aggressive bots, which streamers felt was insufficient at the time. (Twitch has since overhauled its safety and moderation practices, which has successfully decreased the frequency of hate raids, according to numerous streamers.)

To some streamers, the revenue share changes, in particular, were signs that Twitch was no longer in-step with its creators the way it once was.

Twitch is still most streamers’ go-to platform, and the most heavily monetized livestreaming platform — but the recent upheaval made them feel like they are merely using Twitch, not working in tandem with the platform to build something greater.

During the early days of the platform, Twitch employees often participated in streamers’ live chats, and most Twitch streamers worked closely with dedicated account managers on staff. These days, many streamers, particularly smaller to mid-sized ones, are no longer in regular contact with Twitch staff.

As Gappy, a Twitch streamer who requested anonymity, said: “Most people probably can’t even name the upper management that’s at Twitch.”

And as streamers feel less connected to Twitch, they feel the demands for them to run ads are increasing, making them feel less like valued talent and more like cogs in a revenue-generating machine. “As soon as they announced the 50/50 [revenue share] split, I was like, ‘cool, they’re all in on ads,’” said Twitch streamer Shaun Bolen.

Twitch needs to make money, and ads have proven to be an effective way to do that. But at this point, many streamers view Twitch’s growing ads focus as proof that the platform is prioritizing profits above all else — and that it appears to be willing to burn its goodwill with the community to achieve that.

It is perhaps inevitable that Twitch’s increasing focus on ads would lead to challenges in its relationship with its users. It’s what happens when any social media or entertainment platform tries to monetize more effectively; executives at Netflix and TikTok have certainly felt the heat, too, following their own advertising pushes. Scaling up ads always requires a balance between advertising and user experience — and ads were always going to be an important aspect of Twitch’s revenue-generating strategy as it scaled.

As the distance between Twitch staff and Twitch users widens, the nature of community on the platform is changing. In the past, users viewed themselves as members of the “Twitch community” and were more loyal to the platform than to any of its individual streamers. 

Just look at Microsoft streaming platform Mixer’s failure to bring over large numbers of viewers when it signed exclusive partnerships with top Twitch streamers Ninja and Shroud in 2019: for the most part, their audiences just moved down to the next-most-popular streamers on Twitch rather than leaving the platform altogether.

By 2022, the situation had changed. After top Twitch streamer Ludwig Ahgren signed an exclusive contract with YouTube in December 2022, his viewership declined far less than Shroud’s had following the jump to Mixer — which could show that the livestreaming audience is now more willing to follow streamers from platform to platform than it was in 2019.

“The community is unbelievable on Twitch right now, but one of the biggest differences is that each individual creator has learned to craft their own community,” said Twitch founding team member Marcus Graham, who served as the company’s head of creator development until September 2022. “But the piece that’s missing is that connection between the community and Twitch itself.”

A different kind of growth

In spite of streamers’ concerns, Twitch has arguably flourished in recent years. During former CEO Emmett Shear’s 12-year tenure, he guided the company from the startup days to a $970 million Amazon acquisition in 2014. In 2015, the platform’s daily active user count was roughly 7 million. These days, Twitch’s daily active user number is closer to 30 million.

“People just don’t appreciate the struggle to even get to that point — like, the number of times [Twitch ancestor] Justin.tv almost ceased to exist because of costs associated with scaling and infrastructure,” Graham said. “And it’s a damn shame, because the network that is Twitch, and now Amazon IVS [Interactive Video Service], is, from a technical standpoint, one of the most impressive things the internet has seen over the last decade.”

But Twitch took advantage of this technological development to invest in its ad offerings — and pulled back from its intimate conversations with creators, according to multiple streamers.

One source pointed to tools such as Twitch Clips — brief snippets of livestreams saved for posterity via Twitch. After Twitch discovered that users were spending too much time simply scrolling through the day’s top clips, discovery of new Clips was actively made worse in a bid to redirect this traffic to ad-supported livestreams, according to a Twitch employee who spoke to Digiday on condition of anonymity. Other Twitch streamers said the company doesn’t offer organic growth tools, such as those on TikTok and YouTube.

Again, the company declined to comment on matters like this.

“It’s not so much that they haven’t invested in general,” said Justin Miclat, a talent manager and founder of The Kinetic Group, “but it’s that the investments that they made haven’t sufficiently encompassed the broader opportunity they’re in.”

A conscious pivot

Twitch’s uncoupling from the streaming community represents a pivot from community building to simply running the basic tools and services necessary for the practice of livestreaming. Twitch no longer wants to be a town square for the streaming community; it wants to be an infrastructure platform, like Amazon Web Services, according to multiple former staffers.

In the early days of Twitch, around the time of the Amazon acquisition in 2014, the company used a “growth team” of streamers and community leaders hired directly from the gaming community to ingrain itself among gamers. 

These community experts were each tasked with winning over specific groups: Nintendo fans, speedrunners, “Counter-Strike” players and so on. They were given ample budgets to spend as they pleased, with the explicit purpose of building up those communities’ use of — and dependence on — Twitch.

“They’re the best partnerships people you can you can hire,” said Arian Fathieh, who was part of Twitch’s growth team between 2014 and 2019. “In gaming, business relationships are often established through personal friendships. So that was part of the core concept: you hire community people because they’re going to be able to authentically talk to those communities.”

Alongside its growth team, Twitch also invested in original content to keep users and talent interested in Twitch, such as Twitch Rivals, an online tournament series featuring popular streamers.

But community loyalty doesn’t generate revenue. As time went on, the very same community-oriented departments that helped the platform gain its purchase began to feel more like liabilities as Twitch turned its focus toward advertising tools.

So when the Twitch layoffs began — first in 2022, then continuing two weeks ago — the community growth and original content departments were hit hard. The growth team is long gone, with its last remnants leaving Twitch in 2021; Twitch Rivals still exists, but its purpose is to be used as inventory for ads and brand partnerships, not to build an affinity between Twitch and its community. Partner managers are spread increasingly thin and assigned random groups of streamers rather than cohesive groups or sub-communities. Instead, much of Twitch’s product development is increasingly focused on advertising, according to former staffers.

“There was just an org shift,” Fathieh said, “and those things don’t seem to be important anymore.”

Well, here we are

As much as streamers and former Twitch staff might decry the company’s pivot from community hub to streaming utility company, its user numbers have largely continued to grow year over year. At this point, Twitch has firmly established itself as the home of livestreaming, regardless of how welcome the streaming community feels in that home.

“Were we performing a mission critical business? Were we a business unit that was bringing in revenue, or interfacing with partners? Not necessarily,” said Ben Goldhaber, a founding team member and former director of content marketing at Twitch. “But we were teams that maintained the relationship with the community — that’s all we did, that’s what our team was about. And that was just deemed as not an important thing.”

For Twitch and its creators, there’s no closing Pandora’s box. Though almost all of the founders and founding team members who defined the platform’s early identity are gone. And even after losing its grip on, and way with, the streaming community — Twitch might simply be too big to fail.

“Look, hindsight is always 20/20 — but I do believe that it is possible to grow and retain that culture,” Graham said. “But god damn it, do you gotta work hard to do it.”