How Many Subscription Services Can Consumers Add?

Since viewers of traditional TV are continuing to enroll in digital subscription services like Netflix, former Hulu executive Jason Kilar believes digital viewers might now be ready to add short-form video services as well.

Kilar’s new effort, Vessel, hopes to grab passionate consumers of YouTube’s channel content -- as well as providing content creators with better deals.

Vessel promises subscribers content exclusivity, and access to its videos some 72 hours before they appear anywhere else. The service, which will include some limited advertising, will charge consumers $2.99 a month.  Like YouTube, there will also be an advertising-supported free area.

On the content side, Vessel has signed deals with A&E, Warner Music Group, Funny or Die, Vevo and BuzzFeed, as well as with a number of short-form video creators.

Vessel’s financial terms with content creators will be much better than YouTube’s.  Creators will receive a 70% share of ad revenues and 60% share of subscription revenues. (YouTube typically takes a 45% cut of all ad revenue from its creators’ content).



Earlier this year, YouTube said it was exploring an ad-free subscription service. A year earlier, YouTube started allowing content creators to create their own subscription channels on the site. YouTube also wants to start a subscription music service.

But are consumers ready to add short-form video services to their existing TV-video outlays?

Kilar believes they are: “We don’t want any change to their current business, we just want to be the missing piece to the ecosystem."

Vessel’s marketing line is “Watch your favorites here first.”  As to what content and creators will be promoted, Vessel hasn’t sketched out those details yet.  The service plans to launch next year.

Still, the question remains: How much can consumers add on to their TV/video bill?

A $2.99 a month charge isn’t close to a $9.99 a month Netflix charge. This is short-term video -- not long-term video. And what would happen in a world where traditional TV was sold a la carte?  That could be a lot costlier than what consumers are now spending..  

Consumer appetite for media will continue to grow -- not just in terms of time, but in entertainment budgets. But just how far can it go?

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