Streaming service Vessel is about to enter a new phase of business: Starting immediately, the platform is ad-free for all paying subscribers.
Vessel, which was launched in June 2014 by former Hulu CEO Jason Kilar (pictured), makes its revenue from both ads and subscription fees. Its business model is built around premium content, and offers creators a higher share of revenue than YouTube (YouTube offers a 55:45 split for the creator, while Vessel offers a 70:30 split) in exchange for a three-day exclusivity window.
The ad-based revenue model isn’t going away entirely — non-subscribing customers will still see ads alongside the content. Only subscribers will access the service free of ads, said Kilar in a company blog post.
The service now also offers users an annual subscription fee of $19.99, though subscribers can continue to pay a monthly fee of $2.99. Under subscription model, Vessel also provides customers with earlier access to its video library.
The ad-free model is a natural evolution for Vessel, said Jean-Paul Colaco, SVP of advertising and business development with Vessel.
“As you build into subscription services you always want to add more for consumers,” he told StreamDaily. “That means offering both more content — we’ve increased our content by about 50% in the last eight months — and offering services, which, in this case, was an ad-free option.”
He said that the ad-free option was requested by many Vessel users, but that it will also benefit content creators in the long run by increasing the numbers of subscribers and Vessel’s scale.
In his blog post, Kilar also confirmed that the company will begin experimenting with a 12-month exclusivity model for select creators (meaning content is posted to Vessel — and only Vessel — for a full year). Kilar described the move as a “modest test,” noting that it will include content from creators already partnered with Vessel, such as the popular Minecraft vlogger Jerome Aceti (aka JeromeASF). Aceti has more than 3.9 million subscribers on YouTube, 343,000 likes on Facebook and 735,000 Twitter followers.
Kilar said there are more than 250 content partners currently signed with Vessel, offering more than 300,000 videos.
Colaco said partnered creators receive an average of $50 per thousand views on each video.
Vessel isn’t the only VOD service to offer an ad-free format for subscribers. Hulu announced last year that it would offer an ad-free tier to its subscription service for $11.99 per month, on top of its ad-supported service for $7.99 per month. YouTube also rolled out its subscription platform, YouTube Red, earlier this year, giving customers access to original content for $10 a month.