With nearly 15 years under their belt, Burnie Burns and Matt Hullum have successfully pioneered nearly every viable business model for digital video. From their first viral video to launching SVOD over 10 years ago and from using machinima (the storytelling medium, not the company) to build a breakout digital series “Red vs Blue” to being among the first digital creators to produce and distribute a full-length feature film online. Burns and Hullum have had their finger on the pulse of what works for digital video and the business model of monetizing a fan base.
“For us monetizing our content was one of those examples where necessity is the mother of invention. There was no infrastructure [when we started]. There was nowhere to host video, there wasn’t even a structure for pre-roll ads! The first dollar we ever made for the company was for our subscription service.”
Today, having a burgeoning subscription business is the holy grail; a way to usurp the reliance on the media-buying big dogs, a vehicle for maintaining a one-to-one relationship with the audience, and a way to stay indie while playing alongside mainstream titans.
For Burnie Burns and Matt Hullum, two of the co-founders behind celebrated studio and distributor Rooster Teeth, an accidental viral video and a $13K bill were the “necessities to inspire innovation” and a monetization model that has exhibited true staying-power.
“We had this belief that if we made stuff that we felt sincere about that it would find a home and find an audience,” said Hullum in a phone interview with VideoInk from the “LazerTeam 2” set.
And when Rooster Teeth’s first video for “Red vs Blue” generated millions of views in its first month, it was clear Hullum and Burns were onto something the audience wanted. Just one hitch — in 2003, pre-YouTube, hosting a video and operating a server wasn’t cheap; and every view had a cost associated with it. Going “viral” was a double edged sword — yes, people are viewing your videos, but for Rooster Teeth, that first big bill necessitated monetization, and fast.
“The growth curve was like falling up a cliff, it went so fast,” said Burns. “When we realized we’d be paying that amount, it supercharged everything. So the first dollar we ever made for the company was for our subscription service.”
The company then quickly embraced merchandise, and later, as the brand grew, added formats and began to gain its independence at the hands of a hybrid business model that was working, the ability to do branded integrations and as a last stop, pre-roll advertising.
“ was a remarkable time and changing of the landscape of media and technology. The entire entertainment industry was in so much turmoil over the digital revolution and kind of afraid of it. I think we felt this isn’t a time to be afraid; it’s a time to be excited about new possibilities. That’s what spurred me to give up my job in Hollywood — it was the excitement of being at the forefront of something new.”
And at the forefront they were. The duo pre-dated the dawn of the web series as well as the booming format of using video game assets to create digital stories. They preceded the development of advertising insertion and the creation of the digital studio model.
“It seemed clear to me that there was going to be a major disruption in video in general — and in tv and film,” added Burns. “When we started [this business], Matt and I felt we were late to the game. Now, I see the industry catching up and I dont know why it’s taken this long to get to this point.”
What once was new is now old news for Rooster Teeth. Its modern-iteration subscription service “FIRST”, which has remarkably retained members since 2003, is growing at rapid pace and the company has a steady slate of projects in the pipeline, including “LazerTeam 2″, a feature film sequel for YouTube Red currently being shot on location.
According to Burns the duo “knew people were headed in the direction where [they] were standing,” and now a decade into models that are only now trending for video, the two have picked up quite a few learnings (which VideoInk will share this week).
“The industry has matured to the point where now there’s this convergence that we felt was imminent in 2003, or 2005,” said Hullum. “And, it’s been fascinating to just “wait”. We knew this [was] coming and it’s been fun to wait and watch it develop.”