Report: Startups Trying to Lure YouTube Stars Away From YouTube

Posted on December 9, 2014

YouTube has been a place where people can garner huge followings if they have enough talent. YouTube stars have built significant followings in comedy, music, advice and other categories. Some of these YouTube stars have millions of followers and generate lots of traffic and ad revenues for YouTube.

This traffic and revenue that YouTube has come to rely on is now being threatened by rival companies, such as Facebook, and startups according to a story in the Wall Street Journal. The article says a company called Vessel is trying to lure YouTube stars away from the video sharing king.

The WSJ says Vessel plans to run a different type of video business model. They are going the subscription route. The company was founded by Jason Kilar, the former Hulu ceo. They have already raised $75 million so they do have some money to put towards established YouTube stars.

It seems like it would take a significant amount of money to pull a YouTube star away from the service. They already have an established following on YouTube and get paid by YouTube. The viewers they have on YouTube don't pay to watch their videos, which would change if they switched to a new subscription-based home. The YouTubers may be concerned that if they leave and the startup fails their YouTube audience may not be there for them when they come back.

Vessel and other startups seeking online talent seem to be aware of the large sum needed to lure in the stars. The article quotes a YouTube content creator who says "the competing offers are incredibly attractive." The website says it is coming in 2014, which is nearly over. It will be interesting to see which YouTube stars are on Vessel when it launches. The biggest challenge Vessel faces is probably not acquiring talent. Instead it will be getting consumers to pay subscription fees - if that is the business model they use at launch.

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