Since 2006, YouTube has been the go-to site for online video streaming and in the past decade, the attempt to throw YouTube from its streaming throne has been feeble at best. Sites such as Vimeo, yfrog (yeah, it does video, too) and Flickr exist, but simply can’t boast the multitude of traffic YouTube can. With high traffic comes a strong marketing presence, so how can anyone expect to compete with the ad-logged, Google-owned giant?
Former Hulu CEO Jason Kilar believes he has an answer in Vessel, a new video hosting service that offers early access to new releases for just $3 per month. So how does Vessel gain early access to highly sought vids? By offering higher pay to top creators who agree to post to Vessel first.
YouTube stars make their cash from marketers that advertise before their videos. In turn, YouTube gets paid, and the video creator gets a cut.
Felix Kjellberg, also known by his YouTube moniker, PewDiePie, reportedly earned $7 million dollars making videos in 2014. The guy has nearly 38 million followers and 9 billion views—that’s more than Taylor Swift.
How’d Kjellberg get famous? Playing video games and hollering at the screen, of course. As it turns out, Kjellberg’s gamer-style antics attract the youth and young adult market. As young people watch less and less cable television, marketers have fewer and fewer qualms spending dough online.
So if Vessel officials could convince the likes of Kjellberg to transfer from YouTube, they’d pull a chunk of viewership as well, right? Theoretically, with each subscriber jumping the YouTube ship would bring $3 a month to Vessel.
That means if just half of Kjellberg’s subscribers were to sign up with Vessel and pay for early access, Vessel would gross close to $60,000,000 monthly from subscriptions alone. Accounting for outdated, underwhelmed, or accidental subscribers, bringing half of Kjellberg’s following is a lofty goal—maybe even unrealistic. But this example indicates the absurd amount of money that can be made by, with, and from these online video stars.
Anna Akana, a 25-year-old comedian with 1.2 million subscribers, is already on board with Vessel. According to an interview with NPR, YouTube takes about half of Akana’s revenue from advertisements.
“YouTube revenue has been tanking… I’m making 20 times more with Vessel for doing the same amount of work, if not less, than with YouTube,” Akana said.
It appears Vessel is doing exactly what needs to be done to compete with YouTube—headhunt top earners by offering a pay bump they can’t refuse.
While I find it hard to believe that Vessel, or anyone else, can replace YouTube entirely, I predict it’s only a matter of time before someone finds a comfortable spot in the “premium” online video hosting niche.
And yes, I realize “premium online video” is a bit of an oxymoron in itself, but that’s where we’re at these days.
The online video landscape has been changing dramatically in recent years. Want to make sure you’re not falling behind? Contact us and we’ll be happy to chat.