Vessel Drops Ads for Paying Customers, Ups Subscription Fee Options to Annual Plan

/ Mar 7, 2016

Vessel in the app store

After laying quiet for months, Vessel has emerged with a new blog post noting that the business is going ad-free for subscribers. This comes just over a year after Vessel entered the market boasting a more aesthetically pleasing ad unit that felt like magazine editorial as well as a hyper-short form ad unit that had increased brand recall, according to early tests they had done. Now, Vessel cites customer preferences as the driver for shuttering the ads for subscribers. The free service will continue to be ad-supported.

“One of the most popular requests has been for an ad-free experience. In response, we are excited to announce that, starting today, we will be making Vessel ad-free for all paying subscribers,” said Jason Kilar in the post.

The post is extremely reminiscent of the first launch of Hulu Plus, when the company proclaimed it would go ad-free for a higher subscription cost, then bait and switched consumers to run ads anyhow. Coincidentally, Hulu announced it would go ad-free again in September of 2015.

Now, it seems Kilar is repeating a Hulu playbook, almost to a fault. According to various sources, Kilar and the team from Hulu had tried to push the very ad units on Vessel during their time at Hulu, without success, so it’s interesting to see that those ad units are being shed.

And while Vessel proclaims the decision to change the model is consumer-driven, in reality, it’s likely that Vessel wasn’t able to reach scale enough for advertisers to make the buys at the rates Vessel asked. A source from a media agency tells VideoInk that all of the agency’s clients declined to advertise with Vessel on account of this very issue. The creative community distributing content on Vessel has also noted that Vessel has *been reworking contracts with creators, on account of the limited user base on the platform and learnings about the audience.

When the business launched, a crucial piece of Vessel’s value offering to creators was the sizeable up-front guarantees for ad and subscription rev shares. Still, today, Vessel notes it is paying creators an average of $50 per 1000 views, of course, a relative number dependent on the viewership, i.e. if a creator’s content is only getting 500 views per episode, they are making only $25 for a video, if that.

The  company also announced it would offer a new subscription package for $19.99 annual rate versus the monthly $2.99 price point. Vessel is competing with YouTube Red and Spotify, both of which are $9.99/month, Hulu and Netflix, which both offer $7.99 and $9.99 options, and other category specific services like Seeso, which is priced at $3.99.

Vessel was established as a short form video platform that offered early access to content, replicating the Hollywood model of box office as a first window. Vessel’s mission is a tall order but one that will no doubt take time, and patience, as they educate a market and attempt to drive cascading revenue tiers for content creators.

*Updates made to reflect information provided by Vessel.

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