The encyclopedia · Strategy & Leadership · Strategic decision · 2015–2016
Vessel raised over $130M for early-access video — Verizon bought it to shut it
Vessel, Jason Kilar's $2.99-a-month early-access video service backed with over $130M, was bought by Verizon on 26 October 2016 and shut down five days later.
Vessel · Verizon · 2016-10
What happened
Vessel was the second act of the men who built Hulu: Jason Kilar and Richard Tom launched a beta on 21 January 2015 with a simple pitch to creators and fans — pay $2.99 a month and get videos at least 72 hours before they went public anywhere else, with creators keeping a better cut than YouTube's ad model offered.
The money was serious: more than $130 million from Benchmark, Greylock, Bezos Expeditions and Institutional Venture Partners, and a roster of YouTube stars signed to post early. Twenty months after launch, though, the company's exit was not a public offering or a growth round but a sale to a buyer that wanted its parts.
Verizon announced the acquisition on 26 October 2016 — terms undisclosed, and the point was the technology, product and team, not the service. Vessel shut down on 31 October 2016, five days later. Its people were folded into the revamp of Verizon's own video app go90 — a restructuring that laid off 155 existing go90 staff. Richard Tom became CTO of Verizon Digital Entertainment; Kilar left after the transition.
Why it happened
- Early access was the entire pitch — 72 hours first — and it did not build a durable paid service.
- More than $130M raised, and twenty months after launch the only exit on offer was a sale to a strategic buyer.
- Verizon wanted the team and the technology for go90 — an acqui-hire that needed the service gone.
The lesson
Vessel raised over $130M to prove early access was worth a subscription; twenty months later Verizon's acqui-hire said the team was worth more than the service — shut down five days after the sale.
Aftermath
Vessel's technology went into go90; Richard Tom stayed as CTO of Verizon Digital Entertainment, and Jason Kilar moved on.
Sources
- Wikipedia — Vessel (website) (co-founded by Jason Kilar and Richard Tom, former Hulu executives; limited beta launched 21 January 2015; subscription $3 monthly or $20 annual for Early Access — videos a minimum 72 hours before public release; revenue from subscriptions and ads; acquired by Verizon 26 October 2016; shut down 31 October 2016; team acqui-hired to revamp go90, with 155 existing go90 staff laid off; Richard Tom retained as CTO of Verizon Digital Entertainment; Jason Kilar departed after the sale)
- TechCrunch, 26 October 2016 — Verizon acquires subscription video service Vessel, will shut it down (acquisition announced 26 October 2016, terms undisclosed; Vessel raised more than $130 million from Benchmark, Greylock, Bezos Expeditions and Institutional Venture Partners; $2.99 a month for early access to videos; enlisted YouTube stars and other creators; Verizon bought it primarily for technology, product and team to integrate social features and explore subscription models; service shut down; Jason Kilar stayed through end of 2016 for the transition but not long-term; Richard Tom remained at Verizon)
spotted an error? The club wants to know.
More like this
Verizon spent $1.2 billion on go90 and shut it down in three years
Nike gutted the team behind its own sneaker-drop app during a turnaround
Amazon Go: the cashierless store Amazon spent eight years shrinking
Somewhere, someone solved the problem this company failed at. 2nd Opinion →
Comments · 0
Sign in to join the comments.