Though Vessel has a free, ad-supported version, Kilar projects 80 percent of Vessel's business will be its $2.99-a-month model, which gives viewers access to exclusive Web video, plus some ads, before being made available elsewhere.
The company has signed deals with YouTube stars and channels like Tastemade, plus traditional content companies 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.
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Most of Vessel's ads are 5 seconds long, but they aren't up long enough to be annoying. In addition to brief the ads, the experience feels different than YouTube or Hulu. Vessel enables "simultaneous browse" so users can find new videos while continuing to watch. It also features a range of new categories—like "Rant" within the comedy category—so it's easier to discover the curated content.
Kilar said a better model for creators should use more, better, exclusive content. "The reason why we started Vessel is that we looked at the landscape of media and we thought it could be better," he said.
"Part of making media better is to serve video creators in a very, very strong way, so we're being generous with the fact that 70 percent of all advertising goes back to the video creator and subscription dollars go back to the video creator as well. So to give you a comparison, on the free Web, a video creator typically earns about $3 per 1,000 views. On Vessel we project that they will make over $50 per thousand views."