Vessel, the YouTube-like competitor started up by former Hulu CEO Jason Kilar, has found the exit door about 18 months after the service went live.
Verizon announced Wednesday that it has signed a deal to acquire the technology and software that underpins Vessel’s online video subscription service, noting that the deal will help to accelerate its OTT video efforts and to add enhanced content discovery elements and other features. Verizon said it will also hire “most” of Vessel’s employees.
Financial terms of the deal, expected to close later this month, were not disclosed. Vessel has raised more than $134 million, a figure that includes a $57.5 million “B” round announced in April 2015.
Following a brief invitation-only beta trial, Vessel launched commercially in March 2015. Its “early access” subscription product provided temporary exclusives (usually a 72-hour window ) to short-form videos for $2.99 per month. In March of 2016, Vessel went-ad-free for all paying subs, and added an annual plan that cost $19.99. Vessel has not announced how many subscribers it has. Recode reported last month that Verizon was interested in acquiring Vessel, and that Vessel had had trouble luring YouTube stars to its service. .
“Though the team and the actual tech + product will live on at Verizon in ways that will become apparent in the months and years ahead, sadly we will be sunsetting the Vessel service at the end of this month (October 31),” company co-founders Kilar, Vessel’s CEO, and Richard Tom, its CTO, announced in this blog post. “All subscribers of Vessel will be provided complimentary access for the month of October, and subscribers of our annual plan will be refunded back to the beginning of October.”
They said Tom will be head up the technology and product team going forward, while Kilar will focus on a “smooth transition through the end of this year.”
For Verizon, Vessel’s adds to an IP video and OTT tech portfolio that includes the OnCue assets acquired from Intel in 2014. Verizon, which launched its ad-based go90 OTT service in the fall of 2015, is also in the process of buying Yahoo’s operational business. Verizon closed its $4.4 billion deal for AOL in July 2015.
“When we examined and evaluated all that the Vessel team has executed to date and their technical strengths in areas of content discovery, recommendation, OTT subscription management and user experience management we were able to identify a number of ways this was a smart pairing,” Chip Canter, GM of Verizon Entertainment, said in a statement. “With Richard Tom leading technology and operations and Lonn Lee heading up product, we have the upmost confidence in our ability together to rapidly execute and enhance our products.”
“We are incredibly excited to have the opportunity to help shape the future of video on a dramatically larger scale with Verizon,” added Tom. “We are grateful for their confidence in our technology, product and team as well as their commitment to the innovation ahead in online video.”