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Vessel Drops Ads From Subscription-Video Service, Copying Hulu and YouTube Moves

Jason Kilar-led startup also intros $19.99 annual plan

The model for Internet subscription video is firmly established: If users are shelling out money to watch entertainment programming, they’d prefer to not see any commercials.

Vessel, the startup led by ex-Hulu CEO Jason Kilar, announced that it is dropping ads for all paying subscribers. The service will continue to serve ads in content in front of the paywall, free to anyone, but only subscribers will have access to exclusive early-window content.

Vessel’s move comes after Google launched YouTube Red, a $10 monthly ad-free service that includes a selection of original shows and movies and unlimited music streaming. Meanwhile, Hulu introduced a $12 monthly commercial-free option last fall but maintains the original $7.99-per-month plan with ads.

Ultimately, ad-free SVOD was pioneered by the granddaddy of them all: Netflix, which has never carried advertising on its service, and execs have vowed that they have no plans to change that.

Vessel, whose paid service features an exclusive seven-day (or longer) window on content from about 250 partners, also launched a new $19.99 annual subscription plan — a 44% discount from the regular $2.99-per-month option.

The company also is experimenting with full-year exclusives with a small group of creators, including Linus Media Group, YouTuber Brittani Louise Taylor and gamer JeromeASF.

“Vessel’s ambitious mission has been to build a decidedly different — and better — video platform for creators and fans,” Kilar wrote in a blog post Monday announcing the changes.

It’s not clear how much traction Vessel has picked up since officially launching a year ago; the company has not disclosed subscriber figures. According to Kilar, the company is “still very much in the early days,” but has signed up customers in more than 155 countries.

The Vessel service now offers more than 300,000 videos from its 250 content partners, up over 50% since last summer. Kilar said Vessel partners participating in the early-access program continue to earn more than $50 in revenue per thousand views, which he has claimed is well more than 10 times the revenue they make on ad-supported platforms.

San Francisco-based Vessel has raised more than $134 million in capital to date. Vessel’s Series A investors — Greylock Partners, Benchmark and Amazon founder and CEO Jeff Bezos’ Bezos Expeditions — also participated in the round.

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