Former Hulu CEO Jason Kilar’s Vessel Launches To The Public

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Vessel, the new online video subscription service built by some of the early team at Hulu, is launching to the public today.

The service — which provides early access to videos from YouTube stars through a monthly subscription fee — has been in private beta since the beginning of the year. It is now available to everyone on both the web and iOS.

Former Hulu CEO Jason Kilar and CTO Richard Tom founded Vessel on the premise that folks would be willing to pay $2.99 per month to get content from popular YouTube stars 72 hours early.

Content that will eventually be free, but delivered early, for a fee. It seems like a hard sell.

But Kilar and his team actually did this six years ago with Hulu. His team started to see the value of early access offerings with the Hulu model. “Then Hulu Plus came along and we offered Modern Family 7 days earlier and became the fastest paid subscription service in U.S. history.” Kilar said.

Hulu hit the 2 million subscriber mark, nearly doubling from the year before, in the spring of 2012. Compare that with movie subscription service Netflix, which had 24.4 million subscribers at the same time and added 610,000 new subscribers in the first quarter of that year.

Kilar and his team hope to recreate that kind of growth with a “millenial” audience on Vessel. Some of that involves signing up popular YouTube stars with faithful followings such as “Good Mythical Morning” and “Machinima,” with 6.2 milllion and 12.3 million subscribers, respectively. It also involves an updated UI that works with any video format and swapping out the 30 to 60 second traditional ads for 5 second pre-roll advertisements.

“It’s made for a mobile audience,” Kilar said of the advertisement structure.

Part of the plan to encourage people try Vessel involves incentivizing the creators. Vessel is offering each creator $7 for every fan they convert to a Vessel subscriber. Kilar believes this encourages “messaging” from the creators to their fans to make the switch. Creators have further incentive to do this because Vessel pays them better on average, according to Kilar. He estimates that through a mix of ads and subscription revenue Vessel creators could get CPMs of about $50 through the service, versus an average of $2.20 per thousand views on YouTube.

That creates a viral incentive to organically push the new service out, and would be easy for a fan to at least sign up to try Vessel out. The service offers a 30 day free trial.

Will fans stick around after that? Tough to say, but the subscription content model has been done before. Hulu, Netflix, Spotify and Pandora are all based on it. Even the subscription-based funding site for artists, Patreon, seems to work well this way – it recently bought out its competitor Subbable.

Each of these subscription services have unique offerings – Netflix offers original content, Pandora and Spotify curate easy playlists, Hulu offers early access to content. Will early access to YouTube channels work for Vessel? It’s early days for that.

At launch, the service is adding a total of 135 creators to its current 30 and offering a 12-month free subscription for anyone who signs up in the next 72 hours. Now we wait and see whether the early birds pay up.