Vessel to close after Verizon technology acquisition
October 27, 2016
To accelerate its OTT video efforts and roll out of enhanced content discovery and innovative features, US telco Verizon is to acquire the technology and software that underlies Vessel’s online video subscription service, which provides early access to videos from online video stars, and to hire most of Vessel’s employees. The deal will see Vessel close as a service at the end of October.
Terms of the transaction have not been disclosed. The acquisition is subject to the satisfaction of several closing conditions and is expected to close later this month.
Vessel was founded in June 2014 by Jason Kilar, the former CEO of studio-owned online entertainment service Hulu, together with co-founder Richard Tom (formerly CTO at Hulu) as CTO.
“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, GM 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.”
“We are incredibly excited to have the opportunity to help shape the future of video on a dramatically larger scale with Verizon,” said Tom. “We are grateful for their confidence in our technology, product and team as well as their commitment to the innovation ahead in online video.”
Verizon says its multi-platform video strategy is driven by unmet customer and advertiser needs and matches the trends of increasing wireless video traffic and decreasing large bundle demand. Verizon is committed to providing content from the industry’s top creators on a mobile-first distribution platform both on and off the Verizon network.
In a blog post, Kilar and Tom said that Verizon shared their belief that Internet Protocol would inevitably become the dominant way consumers access great video experiences. “The Verizon team has backed this conviction with material investments and a focus on what makes them unique in a competitive marketplace. It’s easy for our team to imagine the amazing ways customers can be served when Verizon’s high speed wireless platform is combined with their strategic commitment to video and our team,” they wrote.
“At the heart of this transaction is the Vessel technology, product and team that we have built. 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 (October 31). All subscribers of Vessel will be provided complimentary access for the month of October, and subscribers of our annual plan will be refunded back to the beginning of October. Richard will be leading the charge on all things technology, product and team going forward, whereas Jason’s focus will be to ensure a smooth transition through the end of this year,” they advised.