Austin, Texas-based video studio Rooster Teeth, though, has a deceptively simple strategy: Try everything. CEO Matt Hullum said in a recent interview with Re/code that rather than banking only on ad revenue, the company plans at least two potential revenue streams, ranging from ads to shirts to product placement, for each piece of content it produces.
That content includes the 11-year-old company’s long-running animated series Red vs. Blue and the more recent anime-inspired series RWBY, as well as a weekly video podcast and hundreds of “Let’s Play” videos starring a squad of funny RT employees who call themselves Achievement Hunters.
Until the two companies parted ways last year, though, Rooster Teeth’s ad sales were all handled by Machinima, which frequently touted Red vs. Blue as one of the jewels in its own gaming-video crown. Although it’s glad to be building its own relationship with YouTube now that it’s no longer “hidden behind a partner,” Hullum said the former lack of control encouraged Rooster Teeth to find alternate methods of monetization, including a $20/year “sponsorship” program for viewers that removes ads and unlocks bonus videos and — one of the biggest money makers — merchandising, in a store that sells DVDs, music and shirts based on its videos.
“We sell stuff in so many different ways, so we can give advertisers and marketing directors a lot of different options,” Hullum said.
Plus, the company runs an annual gamer convention in Austin, RTX, that’s expected to draw 30,000 attendees this year. At last year’s RTX, an onstage spat between two of the site’s video personalities, Joel Heyman and Jack Pattillo, resulted in Heyman reading Pattillo’s personal cellphone number into the microphone. Rooster Teeth now sells a shirt with the number on it.
RocketJump co-founder Freddie Wong, who spoke at the first edition of RTX, said that sort of diverse monetization is the new normal, and something his company also focused on in merchandising around its own hit gaming-video series, Video Game High School.
“Video content yearns to be free,” Wong said. “You have to figure out some way of making money without relying on video ads or people paying to download.”