Verizon Acquires Jason Kilar's Vessel
Kilar will help with the transition through the end of the year and is then expected to leave the company he co-founded.
Verizon has agreed to acquire the technology and software that powered Vessel, Jason Kilar's subscription video startup.
Kilar, who previously ran Hulu as CEO, will ensure a transition through the end of the year but is not expected to remain with the company. His co-founder, CTO Richard Tom, will continue to lead technology and operations for Verizon Entertainment.
As part of the deal, Vessel, which provided early access to content from popular YouTube stars, will be shut down on Monday. In a Wednesday blog post, Kilar and Tom wrote that subscribers would receive a free month of service in October and that annual subscribers would be refunded.
"At the heart of this transaction is the Vessel technology, product and team that we have built," they wrote in the post. "These three things will be married with Verizon's ambitions in online video. Though the team and the actual tech + product will live on at Verizon in ways that will become apparent in the months and years ahead, sadly we will be sunsetting the Vessel service at the end of this month."
Terms of the deal were not disclosed. The telecom giant says it plans to hire most of Vessel's employees and is positioning the deal as a move to accelerate its over-the-top video efforts. The company — which has acquired AOL and is in the process of completing its deal for Yahoo — currently operates free, ad-supported go90 and is working on a premium, shortform video service in conjunction with AwesomenessTV, in which it owns a 24.5 percent stake.
"When we examined and evaluated all that the Vessel team has executed to date and their technical strengths in areas of content discovery, recommendation, OTT subscription management and user experience management we were able to identify a number of ways this was a smart pairing," said Chip Canter, general manager of Verizon Entertainment. "With Richard Tom leading technology and operations and Lonn Lee heading up product, we have the upmost confidence in our ability together to rapidly execute and enhance our products."
Vessel launched to much fanfare in 2014 and had raised more than $130 million from Bezos Expeditions, Greylock, Benchmark and Institutional Venture Partners. The company's ambitious plan was to offer early access to shortform videos created by online stars through a $2.99 a month service. But Vessel failed to catch on with customers who were accustomed to watching that same content for free on YouTube. The company was said to be planning a pivot and, according to sources, had not re-upped many of its deals with creators, which early on were quite rich in an effort to attract creators not accustomed to distributing their content off YouTube.
"We are incredibly excited to have the opportunity to help shape the future of video on a dramatically larger scale with Verizon,” Tom said in a statement. "We are grateful for their confidence in our technology, product and team as well as their commitment to the innovation ahead in online video."