Hulu’s former CEO’s new ‘Vessel’ tackles online video, lures YouTube stars

Jason Kilar
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Jason Kilar

Hulu's former CEO, Jason Kilar, announced a new online video venture named Vessel.

The goal is to re-invent the online video business, and create a new, sustainable business model for YouTube stars and other original content creators, while giving their fans exclusive early access to videos.

It's a move to steal viewers from YouTube, and content creators from IAC's Vimeo, which recently launched a premium on-demand model. Kilar believes that a percentage of various YouTube stars' millions of online fans will pay for early, exclusive access to videos.

Vessel's model is this: For $2.99 a month subscribers will get access to short-form videos for three days before they're available anywhere else. Kilar said the subscription can be that low because there will be some ads incorporated into the videos.

He wrote in a blog posted on Vessel's website that creators will earn about $50 for every 1,000 views, which he said is as much as 20 times the levels earned from platforms that are only ad-supported, which include YouTube, AOL, Yahoo and others. After that exclusive 72 hour period creators can post their content across the web, including on YouTube, while those videos then become available on Vessel in a free, ad-supported version of the service.

Today Vessel is opening its service up to creators, making the pitch for them to bring their content to Vessel for that exclusive window. A launch to consumers is coming early next year.

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Kilar is hardly the only one trying to tap into the value of YouTube's biggest stars. IAC's Vimeo is making a big push to lure over YouTube stars to sell their videos through an on-demand format in exclusive windows.

Vimeo takes a ten percent cut of revenue, much less than what sources tell me YouTube takes. This comes as YouTube network Maker Studios works to build its own video platform, Maker.TV, with higher ad rates than YouTube. Another network, Fullscreen—which AT&T and Chernin Entertainment recently invested in—is also reportedly working on a subscription service for its stars.

YouTube is hardly sitting still, and is looking to lure stars frustrated with the fact that they're not making more money from their fans. CEO Susan Wojicki is rolling out various perks at YouTube's studios around the world, saying the company's working to better promote YouTube stars so they earn more from their videos. She even said in October the company is exploring subscription offerings and is open to offering certain stars a better split on ad revenue.

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Correction--This story has been updated to reflect the correct amount of money Vessel will offer creators per video viewing.