Following YouTube Red, video subscription service Vessel goes ad-free for paying subscribers

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Vessel, the video subscription startup headed by former Hulu CEO Jason Kilar, announced this week that it’s moving in a new direction in terms of the advertising displayed on its service. In a move that recalls YouTube’s venture into ad-free viewing with the debut of YouTube Red, Vessel is also making its service ad-free for all its paying subscribers. Meanwhile, those who use Vessel for free will continue to see ads.

The announcement was posted by Kilar on the company blog, where he also noted that one of the most popular requests to date has been for an ad-free experience.

The company, by way of background, has aimed to carve out its own niche in the streaming video market by offering fans a way to gain early access to creators’ videos – generally 7 days or more, before those videos go live on YouTube. Creators, in turn, have been promised the ability to make more money than on the free, ad-supported sites by adopting this model.

Kilar says this remains true – noting that creators who participate in early access earn more than $50 in revenue per thousand views.

He also added that Vessel today offers over 300,000 videos from over 250 content partners – up over 50 percent since last summer. The company declined to talk subscriber numbers, but claims that viewers from more than 155 countries pay for early access to videos.

There are also now two pricing tiers for paying customers – either the standard $2.99 per month or the new $19.99 annual subscription, unveiled just today.

Unspoken in the announcement is the fact that YouTube’s launch of its own ad-free experience, known as YouTube Red, may have thrown a bit of a wrench into Vessel’s plans. With the ability to pay for the same videos on Red, sans advertisements, paying for early access to videos that included ads may have seemed like less of a draw for potential customers.

It’s also unclear to what extent the young demographic that Vessel caters to is willing to pay at all, given that the company doesn’t talk subscriber numbers. (That could also be the reason for the new, steeply discounted, subscription tier.)

To some extent, you can gain insights into Vessel’s traction via its mobile app’s rankings. And that’s not looking so great – the app is an invisible No. 1279 on the iTunes App Store “Entertainment” category (and falling) in the U.S., and No. 490 in the same category on Android. Given that it’s focused on the mobile video consumer market, this may indicate that its audience – including both free and paid users – is still fairly niche.

Vessel hints at its plans to grow this audience, however, with news that it’s also expanding beyond its “early access” model with the launch of full-year exclusives. The company characterizes this as only a “modest test,” but has already lined up creators, including Linus Media Group, Brittani Louise Taylor and JeromeASF to participate, it says.