By Sahil Patel
Vessel, the stealthy short-form video startup from former Hulu CEO Jason Kilar, is ready to show what it’s got.
The ad-supported and subscription video service — essentially Hulu for short-form video — is launching in “creator preview” mode, allowing video producers to see, play around with, and upload their videos ahead of the consumer launch in early 2015. The subscription version will be priced at $2.99 per month.
So what’s the pitch? As previously reported, Vessel wants video creators — from new and traditional media, according to Kilar — to distribute their content exclusively on Vessel for a certain period of time. In most cases, this would be 72 hours, before creators are free to distribute on other video sites, including YouTube.
In return, Vessel is promising multiple forms of revenue, and better rates than what creators are typically used to.
Creators will get 60% of all revenue generated from Vessel subscriptions. The company will dole this money out based on how much time viewers spend on a creator’s channel or content. For instance, if one creator’s videos accounted for 5% of all minutes spent on Vessel’s subscription service, then that creator would get 5% of the subscription dollars set aside for creators.
“During the early access period on Vessel, we estimate that creators will earn approximately $50 for every
thousand views (up to 20x the levels earned from free, ad-supported distribution),” said Kilar in a blog post announcing the soft launch.
There’s also the ad-supported, free version of Vessel. Here, the company is promising 70% of all ad revenue generated against their videos.
A third revenue stream comes via a referral program set up by Vessel, which will pay creators for every fan they’re able to convince to subscribe.
While most of the news confirms what’s previously been rumored about Vessel, Kilar is savvy in how he’s pitching the upcoming service to creators. More from the blog post:
“Despite the many positive things that the internet has made possible in media, to date there hasn’t been a clear path for most of these talented creators to build sustainable, enduring businesses on the basis of their video storytelling alone. We believe that media can, and should, do much better.
Today, most creators and content owners put their content on the free, ad-supported web in the hope that they can create a sustainable business. However, they often only earn low, single-digit dollars for every thousand views their videos generate. At this level of monetization (or even 5x this level of monetization), it is extremely challenging — if not impossible — for most creators and content owners to realize their creative and professional ambitions if this is the sole manner in which they release their content.
This is not just a creator problem — it’s a consumer problem too. Challenging economics constrain which ideas creators can afford to pursue. This means fans may never see a creator’s next big idea, or experience it in the way it was originally envisioned. Making things worse, some creators feel the need to “graduate” to another medium (e.g., traditional television) to make more money, leaving their digital audiences behind. In this process, the creator often cedes control and stops making the content fans want most.”
In other words, he knows it’s difficult for creators to make money on the ad-supported video web. So come join him and his new startup as it tries to help you make more, so you can make more of the stuff you love.
Will this work? It’s tough to say. There’s no guarantee that the opportunity to watch new videos from their favorite stars three days before everyone else, and on a service that admittedly looks really nice, will be enough to convince people to pay $3 per month.
And while $50 for every 1,000 views looks nice, Vessel will also need to be able to attract the kind of audience that would make such an offer worthwhile.
That said, Kilar has as good track record as any — as well as a $75 million war chest — to give it a shot.
Right now, the company has a decent number video creators and networks on board to test the service. These include YouTube MCNs like Machinima, Tastemade, and DanceOn, as well as stars like Rhett & Link, Ingrid Nilsen, and Shane Dawson.
Non-YouTube video networks and traditional media companies are also willing to give Vessel a try, including CollegeHumor, Funny or Die, Vevo, Major League Soccer, BuzzFeed, Time Inc.’s Sports Illustrated, and A+E Networks. For these companies, though, there is no “early access” option, as Vessel will merely function as another place to distribute their videos.
Creators interested in distributing on Vessel can apply here.