Vessel starts invite-only beta of its early-access video service

Former Hulu CEO Jason Kilar wants you to test his new video subscription service Vessel — if you don’t do it all at the same time, that is: Vessel launched a closed beta test of its service Wednesday, inviting some of the people who have signed up for early access on Vessel’s site ever since Kilar first shed light on the service last month to try it on iOS and the web.

Vessel wants to invite more users in the coming weeks, and could completely open up as early as March. An Android app is expected to launch soon as well, and eventually, the service is going to also target smart TVs and connected devices.

I had a chance to take a sneak peek at Vessel’s slick-looking iPhone and iPad apps earlier this week, and Kilar pitched Vessel to me as an early access window to some of the web’s most popular video content. The idea behind the service is that consumers pay $2.99 per month in order to get videos three days before they appear elsewhere for free.

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Kilar and his team, which includes a number of fellow ex-Hulu employees, were able to sign up YouTube stars like Shane Dawson, Ingrid Nielsen, Marcus Butler and Rhett & Link, as well as online media brands like Nerdist Industries, Tastemade and Machinima. Vessel is also getting music videos from Vevo as well as directly from some of the labels, and some short-form content from traditional TV networks like A&E.

Some of that content is exclusive to paying Vessel subscribers for 72 hours. Other videos will remain behind the pay wall for longer — the decision is up to each and every publisher — and some, like Vevo’s music videos, are available for free to everyone.

Kilar was a big proponent of ad-supported video services while at Hulu, and he told me this week that he is still very bullish about the free, ad-supported web. But just like Hulu, Vessel is also mixing ads with subscriptions. Users can access some content for free, but have to start paying if they want early access. And paying users get first dibs on a lot of content, but they’ll also get to see ads.

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However, Vessel wants to be smarter about advertising. Kilar told me that there will be “no banners or skyscrapers.” The service is instead introducing two fairly unobstrusive ad units: A visual ad that appears between videos in Vessel’s equivalent of the news feed, and a preroll video ad that is just five seconds long. Right now, advertisers on Vessel’s platform include major brands like KFC, Jaguar, Geico and Doritos.

Publishers will get 70 percent of their video’s ad revenue, and 60 percent of Vessel’s subscription revenue. Kilar estimated that this will result in $50 or more per thousand videos viewed, whereas he said that publishers “on the free web” make an average of $2.20 per thousand views.

Of course, even these high ad rates only matter if Vessel attracts a sizeable audience. Kilar insisted that Vessel isn’t trying to compete with any one platform, but rather add another revenue stream for creators, but creators and consumers alike will obviously compare the service to YouTube. Google’s video service may have lower ad rates, but also a gigantic audience, with one billion users visiting the service every month.

For Vessel to compete with that, it will have to grow a sizeable audience of its own. Kilar seemed confident that the company will be able to do that, telling me that Vessel would be capable of amassing “millions and millions” of subscribers over time. I’m honestly not sure if that many people care about getting their web videos three days before everyone else, especially if they have been trained to watch them for free for years, but Kilar seemed undeterred. “Early access is valuable,” he told me.

Jason Kilar’s Vessel delays launch but opens up to creators

Vessel, the online video startup co-founded by former Hulu CEO Jason Kilar and former Hulu CTO Richard Tom, is going to launch in early 2015 with a unique proposition: Vessel wants to give consumers early access to videos that they’d otherwise watch on YouTube. From the announcement blog post:

“Early access on Vessel will be offered for only $2.99 a month, a low price made possible by incorporating a modest amount of advertising. For those not as interested in early access, we also have a free, ad-supported version of the service, where videos become available after their early access period.”

Vessel will offer paying subscribers a three-day early access window, but is also promising video creators that they will be able to publish their clips elsewhere (read: on YouTube) after those three days are over. Which makes you wonder: Will people really pay to get those clips three days early?

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Apparently, creators have been wondering the same thing. Vessel did reveal Wednesday that it is working with YouTube stars like Shane Dawson and Rhett & Link, and that the platform will also feature content from Machinima, Tastemade and others, but word has been that the company has had a hard time signing up creators for its model. That’s despite the promise to give them a lot more money. Again, from the blog post:

“Vessel’s business model (subscription + advertising) will deliver unusually attractive economics for creators, allowing them to pursue their dreams and share ever more ambitious work with their fans. 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). After Vessel’s early access period, creators will continue to earn money through distribution of their videos on the free, ad-supported web – on Vessel and anywhere else they choose.”

Because of the sign-up challenge, Vessel had to postpone its launch. The company tried to get Vessel ready by the end of the year, and in fact, Vessel’s website promised that it was “coming in 2014.” Now, it is only opening up a sign-up phase for creators, and promises consumers to be ready by early 2015.

Vessel's homepage, up until recently.

Vessel’s homepage, until earlier this week