Vessel - web video - online video startups - Fierce 15 2015

Where it's based: San Francisco
When it was founded: 2013

Why it's Fierce: Headed by former Hulu CEO Jason Kilar and former Hulu CTO Richard Tom, Vessel is working to bring the business model for movies to the online video space. Just like movies that have exclusive initial runs in movie theaters before their release on DVD and elsewhere, Vessel is working to offer exclusive access to online video clips before they are disseminated across free platforms like YouTube.

Vessel, which launched early this year, makes money from a combination of subscription and advertising revenue. Users pay $2.99 a month for access to Vessel's exclusive library of clips, and users who don't want to pay for the service can access Vessel's YouTube-style library of free, ad-supported content. Advertisers then pay Vessel to advertise to those users. Importantly, Vessel gives 70 percent of its ad revenue and 60 percent of its subscription revenue to content creators, according to Time, which is higher than the 55 percent of ad revenues that YouTube gives creators. (However, YouTube is reportedly planning to offer an ad-free version of its service that will offer the same terms as Vessel.)

When Vessel launched, the company said participating creators would earn around $50 for every thousand views of their videos by paying subscribers during the exclusivity window. In May, the company said "we're happy to report that the economics we're now delivering to creators exceed those initial estimates." The company said that $50 figure is 20 times bigger than what creators can expect from free, ad-supported distribution.

Although the company hasn't disclosed its subscriber numbers, Vessel is showing some significant traction. Today it offers exclusive clips from individual video creators like Rhett & Link, Shane Dawson, Marcus Butler, Connor Franta, Caspar Lee, Ingrid Nilsen, Tanya Burr, Anna Akana, Brittani Louise Taylor and others. Vessel also offers exclusive content from established names like "The Ellen DeGeneres Show," Machinima, Tastemade, A+E Networks, Discovery Communications, Universal Music Group and Warner Music Group. "Combined, these creators and content partners reach an audience in excess of 200 million passionate fans, and their videos have been viewed tens of billions of times in the past year alone," the company said in response to questions from FierceOnlineVideo.

But that's not all: Vessel also offers nonexclusive content from the likes of NBCUniversal's "The Tonight Show starring Jimmy Fallon" and "Late Night with Seth Meyers," as well as from the NBA, Funny or Die, CollegeHumor, VEVO, The New York Times, BuzzFeed and others.

And more than 30 brands advertise on Vessel, including Chevy, Corona, Jaguar/Land Rover, Lifetime, McDonald's, SquareSpace, TGI Fridays, Unilever and others.

But perhaps the most noteworthy signal of Vessel's position in the online video industry is the impressive support the company has managed to generate among venture capitalists: According to Techcrunch, Vessel has already raised over $132 million in venture funding from the likes of Benchmark, Greylock, Bezos Expeditions and IVP.

What's next: Vessel said it plans to continue to work to scale its business. As part of that effort, the company announced recently that it launched its Android app.

Vessel - web video - online video startups - Fierce 15 2015