A new video hosting service run by the former head of Hulu Plus is hoping that consumers will part with a little bit of cash to be the first in line to view must-see online videos.
Vessel deviates from the no-cost, ad-supported distribution method of YouTube by charging $3 dollars a month for the ability to exclusively view videos of musicians, sports, comedians, and many other forms of entertainment. The premium videos will not be available for viewing anywhere else for at least three days.
CEO Jason Kilar told the Associated Press that he believes Vessel will be able to compensate video producers to the tune of $50 per 1,000 views. This compares favorably with the relatively paltry $2.20 that YouTube pays per 1,000 views. According to eMarketer, YouTube’s ad revenue totaled $7.6 billion last year, with $4.6 billion paid out to its partners.
Kilar feels that better compensation for video producers will encourage them to make more high-quality content, which will then lead to further increases in subscribers.
Vessel already has 70,000 free video clips on its site. Behind the paywall are videos from 130 contributors, including Alec Baldwin, who has a series called “Love Ride” that features him dispensing relationship advice from the back seat of taxi cab.
The year-old startup has raised $77 million in venture capital so far.
Insider Take:
Kilar’s corporate ethos, while it isn’t entirely wrong, is wholly dependent on customers eager to pay for content they may otherwise experience for free. They are directly targeting consumers who are enthusiastic about obtaining access to content before others. On one hand, he is correct that quality content rules all – subscribers will in fact pay to see content they can’t get anywhere else. If the content they host is worth $3 a month and the three-day exclusive embargo, they will succeed.
But if the content is similar to what can be seen elsewhere on YouTube or the legion of other hosting sites, they will ultimately fail. Nonetheless, $3 a month is a small sum and there is likely a niche audience out there willing to hand it over. Vessel’s success (or lack thereof) will indicate the quality of its premium content and the state of YouTube’s primary position in the streaming video market.
