March 25, 2015
Online video subscription service Vessel had its public launch this week for Web and iOS. Founded by former Hulu CEO Jason Kilar and CTO Richard Tom, the service offers early access to the increasingly popular videos created by today’s YouTube stars. Kilar is betting that consumers will be willing to pay a monthly $2.99 subscription fee to access videos 72 hours before they become available for free on YouTube. The model has generated some early skepticism, but it is not much different from Hulu’s approach from six years ago.
“Then Hulu Plus came along and we offered ‘Modern Family’ seven days earlier and became the fastest paid subscription service in U.S. history,” Kilar said.
“Hulu hit the 2 million subscriber mark, nearly doubling from the year before, in the spring of 2012,” reports TechCrunch. “Compare that with movie subscription service Netflix, which had 24.4 million subscribers at the same time and added 610,000 new subscribers in the first quarter of that year.”
The Vessel team is targeting a millennial audience, especially those who are increasingly using mobile devices to access their media content. To address mobile users, the service has an updated UI that works with any video format — and longer advertisements have been replaced by 5 second pre-roll ads.
Vessel is also looking to attract YouTube creators by offering them $7 for every follower they bring in as a Vessel subscriber.
Kilar “estimates that through a mix of ads and subscription revenue Vessel creators could get CPMs of about $50 through the service, versus an average of $2.20 per thousand views on YouTube,” notes TechCrunch. “That creates a viral incentive to organically push the new service out, and would be easy for a fan to at least sign up to try Vessel out.”