How These YouTube Content Creators Just Changed Hollywood by John Gaudiosi @FortuneMagazine February 3, 2016, 10:29 AM EST E-mail Tweet Facebook Linkedin Share icons Rooster Teeth Productions is a prime example of how the power of the video game community is changing the entertainment landscape. Before YouTube even launched, Rooster Teeth founders Matt Hullum, Burnie Burns, Geoff Ramsey, Gus Sorola, and Joel Heman began creating humorous voice-over videos around Bungie’s Halo: Combat Evolved game in 2003 on RoosterTeeth.com. That led to one of the early Machinima series (which uses video game characters and settings to tell original stories), Red vs. Blue, which was also based on Halo. Early on, the company instituted a sponsorship program in which fans could opt to pay subscriptions of $4.99 per month or $15.99 for six months for ad-free videos and access to exclusive shows, behind-the-scenes content, and extended cuts of episodes. The privately held company doesn’t disclose its paying sponsor base. Google’s googl launch of YouTube in 2005 allowed the Austin-based company to grow its community, which today has nearly 8.5 million video subscribers getting access to free content. Now the company, which was acquired by Fullscreen in November 2014, has tapped into its fan base to fully fund its first big-screen film, Lazer Team, as well as change the Hollywood distribution model that has remained in place for decades. It all began back in July 2014, when Rooster Teeth raised a record-breaking $2.4 million on Indiegogo to finance Lazer Team, a live-action science fiction flick. The comedy, which is set in the 1970s, follows the adventures of four small-town misfits (Alan Ritchson, Burnie Burns, Gavin Free, and Michael Jones) who must use an extraterrestrial battle suit to save mankind. For more on crowdfunding, watch: Hullum, CEO of Rooster Teeth, says the company has been able to diversify the types of content it makes over the years, and that’s meant it has welcomed lots of different people into the community. “We’ve always focused on comedy, Internet, and gaming culture, and that’s still the core of our audience, but now we have a huge amount of anime and animation fans, podcast viewers, and sci-fi fans that found us through our movie Lazer Team, and everyone in between,” Hullum says. “It’s awesome to meet them all at events like RTX (its annual Austin fan convention) where you can see how the different interests overlap. It really is an international community just based on common interests.” The full diversity and international scope of that community became clear through a recent partnership with Austin-based startup Tugg, which was able to presell Lazer Team tickets in cities around the world from North America to the U.K. and Australia/New Zealand. The initial Tugg screenings on 500 screens around the world grossed over $1 million, with 100,000 tickets presold in the first week, says Hullum, who directed the film. “This weekend we also launched a traditional limited theatrical run in the U.S. and the U.K. with Amplify Releasing and did over $100,000 in each territory,” he says. “I think we were 11th for per-screen average in the U.S., beating some big Hollywood titles that opened at the same time. We will continue the Tugg screenings in different markets as demanded, as well.” Hullum went this route because he listened to Rooster Teeth fans, who wanted to see the film on the big screen—even in a time where digital distribution is a preferred entertainment medium for everything from eSports to movie releases. Lazer Team will premiere on YouTube Red later this month. “We knew going in that there was a sizable audience for this movie that wanted to watch it in theaters, but they were spread out everywhere,” Hullum says. “Traditionally, that type of audience is difficult to reach because of that wide geography. And a traditional distributor wouldn’t want to take a chance on booking 500-plus screens around the world on a small independent movie like this, but Tugg solved that problem by making it demand-based.” Beyond its big-screen endeavor, Rooster Teeth is developing more original content for its digital audience. Debuting in 2016 is Day 5, an hourlong apocalyptic dramatic series about a world in which people die when they fall asleep. Also premiering this year is the half-hour comedy series Crunch Time, which Hullum calls “Inception meets It’s Always Sunny in Philadelphia.” But the big screen remains a business opportunity for the company, which now has access to additional funding from Fullscreen as well as the ability to tap into its own active community coffers. Get Data Sheet, Fortune’s technology newsletter. “What we found going into Lazer Team is that there are really only giant Hollywood movies and small, niche-audience indies being distributed right now, and not much is being made in the middle,” Hullum says. “We think there is a place to make mainstream, audience-friendly movies that don’t cost a gazillion dollars but can be just as much fun as the Hollywood stuff, while taking some of the artistic risks that usually only indies seem willing to do. “I feel like I got to watch movies like that all the time when I was a kid and the industry has just moved away from it.” Rooster Teeth has proven the model of crowdfunding and crowdsourcing original content can work when filmmakers work directly with their online audience.