For Rooster Teeth, a Bigger Bite

‘Digital-first’ entertainment studio uses two-tiered approach to target millennials, cord-cutters

Underscoring the idea that video is just one piece of the new subscription video-on-demand puzzle, Rooster Teeth has pushed ahead with a two-tiered approach that aims to appeal to its traditional base, as well as a subset of “super fans” willing to pay a handsome premium for VIP tickets to events, merchandise and other perks associated with the “digital-first” content studio.

Starting July 1, current Rooster Teeth subscribers, formerly known as “sponsors,” as well as new subscribers, became members of a new “FIRST” offering that sells for $4.99 per month or $19.99 for six months.

The ad-free FIRST offering provides early access to new videos, exclusive behind-the-scenes content and premium series, as well as access to live broadcasts and a “FIRST-only” panel at RTX, Rooster Teeth’s annual gaming and Internet culture event. (The last RTX took place July 1-3 in Austin, Texas.)

FIRST subscribers also have the option to upgrade to a higher-level tier, called “Double Gold,” for $34.99 per month, or $179.99 for a six-month subscription that includes everything in FIRST, plus a 10% discount on all Rooster Teeth merchandise, exclusive access to live event VIP passes, and a box of merchandise shipped monthly that carries a value of more than $60.

Rooster Teeth also offers some ad-supported content for free to registered users.

The company’s new, rebranded approach to subscriptions draws on a broader trend among over-the-top SVOD services, which continue to pair their core video offerings with ancillary benefits.

For example, anime-focused VOD service Crunchyroll has a partnership with e-retailer Loot Crate that provides Crunchyroll subscribers with discounts on a Loot Crate box of goodies that’s tailored to anime fans and delivered every month. And cable network Turner Classic Movies recently launched TCM Backlot, a fan club that offers members exclusive content, plus the ability to become a “guest programmer” and win on-set tours.

“With our audience, we want to be more than just a video platform,” Rooster Teeth CEO and co-founder Matt Hullum said. “Our audience wants that higher level of engagement and they want more connection. We’re trying to provide more of that on an ongoing basis.…But we didn’t want to do anything that would take away from the community origins of the service.”

Rooster Teeth is not new to the SVOD sphere. It got into the game almost 14 years ago with a subscription-based offering that was as much a fan club as it was a video service.

Like a lot of OTT-delivered SVOD services, Rooster Teeth tends to skew to cord-cutters, cord-nevers and more generally to younger millennials. The company has developed apps for iOS and Android mobile devices, and has work underway to expand to other platforms, including set-tops and gaming consoles, this fall.

Rooster Teeth is also one of the first announced partners for VRV, a multichannel video distribution platform from Ellation that’s expected to launch later this year on devices such as the Xbox One gaming console. Ellation, a portfolio company of Otter Media (the OTT-focused joint venture of AT&T and The Chernin Group) is targeting its platform at fans of anime, animation, gaming, comedy, fantasy and technology.

SEVERAL REVENUE STREAMS

SVOD is just one of several Rooter Teeth revenue streams. According to Hullum, its revenue mix is fairly even across, SVOD, merchandising, advertising and licensing. Its original subscription offering has experienced a growth spurt of late, though, spurring on the decision to launch the two new services.

Rooster Teeth said its paid subscriber base has doubled to more than 135,000 in the past year, and the company expects its new, core FIRST base to surpass 200,000 by year-end.