Online video challenger Vessel eyes YouTube's bread and butter

James McGrath
By James McGrath | 18 December 2014

YouTube has long been accused of eyeing up television's lunch – but now there's a challenger after YouTube's tucker.

YouTube stars will have another potential source of revenue open to them, with online video service Vessel creating a model for stars to boost their revenue if they can guarantee a three day head-start on content.

Vessel is reported to be tapping up YouTube stars, attempting to sign them to the new service.

Online video service Vessel, headed up by ex-Hulu CEO Jason Kilar, will operate a subscription and ad-supported model.

There will be a $2.99 per month subscription service available, whereby subscribers will get access to content from the YouTube stars three days before it appears anywhere else for free.

Vessel is pitching the service as a chance for YouTube stars to increase their revenue.

“Today, most creators and content owners put their content on the free, ad-supported web in the hope that they can create a sustainable business. However, they often only earn low, single-digit dollars for every thousand views their videos generate,” Kilar wrote in a blog post.

“At this level of monetisation (or even 5x this level of monetisation), it is extremely challenging – if not impossible – for most creators and content owners to realize their creative and professional ambitions if this is the sole manner in which they release their content.”

Kilar said during the early stages of the service, it estimated early content players would receive $50 per thousand clicks, which he said was up to 20 times what  content creators currently earn.

He said that 60% of subscription revenue would go into a content creator pool, with the pool to be split up according to a proportion of traffic. In return, creators would have to respect the 72-hour exclusivity window.

However, content creators can elect to put their content on the free ad-supported service, where they can receive 70% of all advertising revenue sold against their content. They would be free to syndicate their content elsewhere.

It is thought YouTube offers its content creators a 55% split, although Google declined to comment this morning.

YouTube currently offers creators access to production stages, should their channels have more than 10,000 subscribers, and it is thought these production hubs in LA, New York, Tokyo, and London have been responsible for 6500 pieces of content since its inception.

It also works with content creators in other ways.

While it is thought there are agreements in place with content creators participating in these programs, it is unclear whether their participation in the programs and the content coming from them is tied to a binding contract.

There are roughly one million channels in YouTube's partner programs worldwide, with about 1000 of those raking in more than $100,000 each. 

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