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How Vessel is Poaching YouTube’s Stars

vessel video

What is Vessel Video?

Vessel, a video platform subscription-based site started by Jason Kilar formerly of Hulu, is looking to position itself as YouTube's first real competitor by signing over a dozen premium YouTube stars as launch partners. Vessel's strategy also includes other premium content such as Project Runway and traditional publishers including "Time Inc. and A&E for such brands as Sports Illustrated and the History Channel. It's also gotten Warner Music and other labels on board, representing a total of 3,000 musicians" (cnbc.com). Vessel videos officially launched its beta to an invite-only preview on January 21 of this year. For $2.99 a month, Vessel subscribers get exclusive access to new videos from dozens of content providers including some of YouTube's stars like the Fine Bros, Miss Glamorazzi, Shane Dawson, Good Mythical Morning and more (also see our post on Vessel vs. YouTube).

Vessel's hope is that the loyal and devoted fans of current YouTube stars will follow them to the new video platform, paying for exclusive early access to their content. It's a big bet (worth $75M in their Series A venture capital funding) that audiences, who are used to not paying to view their favorite content, will now subscribe to Vessel videos at  $2.99/month. Vessel's contract would require YouTube influencers to publish first to Vessel's video platform for three days of exclusivity before publishing to their YouTube channel.

Vessel's founder, Jason Kilar, believes video and channel enthusiasts will pay for early access to premium content. “That’s the kind of person we’re going after, someone who cares deeply about a creator or a brand,” the Vessel founder said. "We believe that they’re passionate about just good content, and it’s our job to deliver it to them early.” (Tubefilter)

How Vessel is Poaching YouTube Stars

Armed with $75M in venture capital funding (Series A), Vessel is catching the attention of the top YouTube talent signing 6 and 7 figure deals in some cases worth millions with YouTube influencers to bring them aboard (Digiday). Vessel's numbers are especially alluring for content creators familiar with YouTube's current rev share model: Vessel shares 60% of subscriber revenue with content creators. In addition, creators will get 70% off revenue made from ads that run through their videos (compared to 55% on YouTube) as well as commission via a referral program for new signing up new users.

Vessel's financial offerings to YouTube's top talent have been substantial, enticing many to sign. These offers have also forced YouTube to counter offer in many cases to keep their signature talent publishing to YouTube first. If Vessel succeeds, it may be hard for YouTube to retain their best talent as Vessel offers multiple monetization options including a premium CPM on pre-roll ads and a rev share on subscribers. YouTube has been criticized in the past for their comparatively high rev share on ad revenue (YouTube splits Adsense revenue 55/45 with creators, channels and influencers). Lastly, YouTube has been a victim of it's own success: because there's so much ad inventory, CPM's continue to stay very low (YouTube channels can expect to review anywhere from $1.50 - $3 CPM on total views). With Vessel promising up to 20-times more revenue through its ads and referral programs, YouTube may need to find new ways to keep its creators firmly on board (ibtimes).

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March 9, 2015 By Evan

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