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Verizon reportedly in talks to acquire Vessel

Vessel is a subcription video service started by former Hulu CEO Jason Kilar

Financial trends and news by Steven Loeb
September 22, 2016 | Comments
Short URL: http://vator.tv/n/4757

Verizon is coming off two major acquisition, first buying AOL for $4.4 billion last year, then Yahoo for almost the exact same price, $4.83 billion in cash, in July.

Despite paying around $9 billion combined in just those two deals, the company isn't slowing down, it seems. It is currently in talks to buy subcription video service Vessel, according to a report from ReCode

The talks are described as "advanced," but there is no word on what the potential price would be.

Vessel,which is run by former Hulu CEO Jason Kilar, bet on users being willing to pay for video content. The video platform asks users to pay $3 a month for early access to premium, short-format video content from creators such as Playboy, Nerdist, Minecraft, Discovery and more.

Vessel launched in March of 2015, and, for a while, it seemed like the company was doing well. It raised $133 million in venture funding, including a $58 million round in April of last year. Investors in the company included  Institutional Venture Partners, Benchmark, Greylock Partners, and Bezos Expeditions.

However, it failed to gain traction among users, who apparently didn't want to pay for content. That was especially true of content that also contained ads, leading to the company eventually dropping ads altogether in March of this year.  

In addition, Vessel was also never able to sign up YouTube stars, who instead opted to stay with the more popular and well-know service. In fact, according to reports,YouTube had been actively trying to block its own talent from posting content on Vessel,"using a combination of cash, promotional muscle and other goodies" to retain them on its platform. That scheme seems to have worked. 

YouTube also took a page out of Vessel's book by  launching YouTube Red, a subcription service, where users pay to see ad-free videos.

It makes sense for Verizon to want to pick up Vessel, considering that video is an important component for the company. It even launched its own mobile video service called Go90, in October of last year. Earlier this year the company acquired nearly a quarter of online network AwesomenessTV, in order to launch a new premium video service with the network on Go90

The purchase of AOL was widely seen as a way for Verizon to get its hands on AOL's video and advertising platform, so it could bolster its wireless video and and OTT (over-the-top video) strategies. Yahoo was also supposedly acquired for its video ad platform as well. 

Of course, this deal could fall through, and if Vessel doesn't wind up selling, it might wind up pivoting instead. According to ReCode, the company is currently working on a new product, one that would be a Snapchat competitor, complete with image filters. 

VatorNews reached out to Verizon and Vessel, but neither company would comment on the report. 

(Image source: vessel.com)


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