Vessel is perhaps the most talked-about and sought-after premium video app on the market right now. It was founded by the team that built and led the first linear television disruptor of any real significance, Hulu.
Some may say it’s premature to feature Vessel and its founders on a list designed to highlight industry-shifting talent and initiatives given the product is merely a few months old.
While we have yet to see the real wake Vessel might create, what Jason Kilar and Richard Tom, and ultimately Vessel, represent is a vision of the future that elevates the value of IP, pushes a bidding war for content and establishes a longer tail business model. This is a vision and platform that can boost and ensure financial and overall economic health for the streaming business and its creators.
Last year we featured Peter Chernin for his role in building Hulu, among other digital initiatives he’s been behind, and in that piece we noted the volume of credit Chernin gives to Kilar in leading the charge at Hulu.
“First of all I did one smart thing at Hulu, which is I hired a great CEO. I hired Jason Kilar from Amazon and he built a great product,” Chernin said in an interview with USC’s Annenberg Center. But Hulu is a product that was also built and overseen by Hulu’s chief technology officer and senior vice president, Richard Tom.
While Kilar repeatedly faced hurdle after hurdle at Hulu, the business always grew and at the time of his departure in 2012 (Tom later followed suit), the company had a head count of more than 600 and an annual revenue number above $700 million. (It’s now well above billion dollars annually.)
Two years and millions in investment later, Kilar and Tom re-emerged with Vessel, a short-form video platform designed to window content at a higher premium before migrating that content to free and transactional VOD platforms. Together, the duo has replicated many of the features and functionality they built at Hulu. They’ve migrated an ad unit that was said to have been originally built for Hulu but that could never get the internal sign off to see the light of day. They’ve developed a hybrid business model that combines subscription for today’s shallow-pocketed youth with quick-hit advertising at a premium rate.
“The reason Rich and I are doing this was ironically inspired by traditional media,” says Kilar.“Over the last six years at Hulu and, in my case, nine years at Amazon, we spent a lot of time with traditional media — whether the film groups or the television groups or the home entertainment groups, even with the studio and production guys. One of the things you can’t help but notice is how the business is organized in film. There are a number of different players serving the filmmaker.”
And while Vessel isn’t targeted at the traditional “filmmakers” per say, it is aimed at helping the new breed of filmmakers — the video creators and the various constituents they work with who enable content distribution and deal-making — make more money.
What’s missing in the digital space is a box-office benchmark and a cascading system that yields multiple buckets of money. Like a pot of gold at the end of a rainbow, money in digital is practically a mythical achievement, something that everyone hopes for, most pretend to find, and few actually see.
“Our passion and our mission is to make media better,” says Kilar. While there are mixed feelings as to whether a minimum 72-hour first window is enough to move the needle, we’ve heard from various content producers who are windowing their content on Vessel that the numbers are already meaningful — meaningful enough to continue testing an early-window strategy on Vessel.
“One of the great things that the architects of the film business realized ages ago was that early access was valuable,” says Kilar. So while Kilar and Tom may be evolving what seems to be an antiquated model, their vision of the direction of this business has already begun to create a foundation for the future of the industry. This, ultimately, could drive a waterfall of money trails for the creators.
Judging by the way Vessel is already driving competition for intellectual property and accelerating the application of premium value of that IP, it seems highly likely that early access, and the associated premium price baked into gaining that access, is a model that will be here to stay.