Video-streaming services have become extremely popular over the last few years, with Netflix now accounting for one-third of global Internet traffic during night hours.
Streaming services in general are quite often criticized for not paying out the royalties that content creators deserve. One service, however, claims to be a little different.
The service is called Vessel, and it was started by former Hulu CEO Jason Kilar and former Hulu chief technology officer Rich Tom. But it's not just an idea. The company has reportedly raised a whopping $75 million in funding from the likes of Benchmark, Greylock Partners and Bezos Expeditions, the personal investment firm of Amazon CEO Jeff Bezos.
The service itself is dedicated to short-form video content. There won't be any movies or even longer TV shows on Vessel. It has, however, been acquiring talent and content rather quickly, suggesting that when it does launch early next year it should be appealing to customers.
The new service will employ a business model that's a little different from companies such as Netflix. It is "freemium" with a windowed release strategy, meaning that payers will get the perks that come with paying a fee, and the company will still be able to offer content for free to those who want it. Paying customers will get videos for 72 hours after they are first released, while free viewers will have to wait three days before they can also enjoy the content.
Content creators also get paid quite a bit of money, especially compared with other services. These content creators will get a massive 60 percent of subscription revenue, which is calculated based on the share of viewing time that a company gets. They also get 70 percent of advertising revenue from their videos. Last but not least, content creators will get an undisclosed sum of money for referrals.
It's important to note that the service is predominantly targeted at YouTube stars, though the company has made agreements with the likes of Warner Music Group and A&E Networks. Both Vevo and College Humor will be providing video content for the free tier of the service.
The company is aiming at offering much higher returns to content creators, making it a valuable service for both the customer and the content creator. While the service might be more geared to the creator than the customer, that's not necessarily a bad thing and it certainly doesn't mean that customers will get the short end of the stick.
While the service might be interesting, it will be tough for the company to be successful. It might have a hard time convincing customers that simply watching videos on YouTube isn't good enough, especially when it seems as though short-form videos are the only thing that the company will be offering. In mid-December, it started accepting content from creators, according to its blog.
