Jason Kilar Reveals Vessel’s Playbook

YouTube Rival Will Offer Subscription & Free, Ad-Based Options
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Former Hulu CEO Jason Kilar shed more light on his new venture, Vessel, announcing Wednesday that the YouTube competitor will launch early next year and sell an “early access” subscription product that provides temporary exclusives to short-form videos for $2.99 per month, a “low price made possible by incorporating a modest amount of advertising.”

Kilar, who believes Vessel’s economic model will serve as a magnet for talent, noted that the new company is forming as he and co-founder Richard Tom “observed that the audiences so coveted by traditional TV were gravitating toward a new generation of digital storytellers," adding that Vessel is “eager to help recognize and foster the explosion of new, talented voices.”

He noted that most creators and content owners “put their content on the free, ad-supported web in the hope that they can create a sustainable business,” but end up earning “low, single-digit dollars for every thousand views their videos generate.” Other creators, he added, “feel the need to ‘graduate’ to another medium (e.g., traditional television) to make more money, leaving their digital audiences behind.”

Vessel, Kilar said, will complement the subscription product with a free, ad-supported version that release videos after their early access window, which will be at least 72 hours in length.

He promised that Vessel’s hybrid subscription/advertising model “will deliver unusually attractive economics for creators, allowing them to pursue their dreams and share ever more ambitious work with their fans.”

Kilar also estimated that creators who opt for Vessel’s early access period, will earn about $50 for every thousand views, up to 20 times the levels earned from free, ad-supported distribution. “This will be a game-changer,” the company promised in its FAQ.

Under Vessel’s economic model, content partners will keep 60% of subscription revenue and 70% of ad revenues generated against their content. Vessel will also support a referral program that pays creators for every new paying sub sent to the service.

Following the early access window, creators can still earn money via distribution via the free, ad-supported web, with Vessel and other outlets.

Vessel, which carries the tagline “Watch Your Favorites Here First,” opened its service to creators Wednesday (Dec. 17) under a “Creator Preview” program.

Vessel is trying to step in and strengthen areas that have been a challenge for content creators that have focused on YouTube.

In a blog post (registration required), BTIG analyst Richard Greenfield agreed that YouTube, despite its speed, reach and innovations, “has remained a tough place for content creator to make a living.”

“For content  creators, the ask is relatively low: just keep your content off other online platforms for 72 hours and you will receive far higher monetization than they have ever seen online…Whether or not Vessel works, it is pretty hard to imagine anyone creating quality, scripted or non-scripted digital content who will not want to utilize the platform,” Greenfield said.