Will Vessel Video Service Make The Same Mistake As Tidal?

Even though many in music hate to acknowledge it, YouTube really runs the music business these days. Multiple studies have found that most discovery of new music online is the result of YouTube, and that the percentage of use increases as the age demographic gets younger.

For that reason, YouTube is a big target for new and existing music services alike. Every entrepreneur wants a piece of those total eyeballs. The problem is that many focus on the wrong part of the equation in an effort to get a competitive edge.

Vessel is a new video network started by two former Hulu executives and backed by Amazon's Jeff Bezos to the reported tune of $75 million. The service hopes to lure users away from YouTube (especially millennials) by giving its subscribers exclusive access to videos not found anywhere else online for a window of up to 72 hours in return for a monthly fee of $3.

The company seems to be basing its success on a strategy of attracting high quality creators by offering them a better deal than they're currently getting anywhere else. This includes 60% of the subscription fee and up to 70% of the advertising revenue for a video that's released on Vessel before another service.

According to the Wall Street Journal, this means that the revenue could go as high as $50 per 1,000 views, a figure that soars past the $6 per 1,000 paid by Vevo and $2 per 1,000 paid by YouTube.

The generous terms has lead to partnerships with Warner Music Group, A&E Networks and YouTube multichannel networks Machinma and Tastemade, according to a New York Times article. Read more on Forbes.

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