Verizon Ups Its Content Game Again, Set To Buy Mobile Video Startup Vessel

In the wake of AT&T's bid for media giant Time Warner, Verizon has set its sights on another content-related acquisition with its plans to acquire mobile video startup Vessel.

San Francisco-based Vessel is a short-form video service that is the brainchild of former Hulu CEO Jason Kilar. Verizon said it plans to use Vessel’s product and technology within its Go90 platform, a mobile video service that has struggled to gain traction in the already-saturated over-the-top video market.

Terms of the deal were not disclosed, but the two companies said they expect the transaction to close within the next 30 days.

[Related: Solution Providers: As Carriers Stop Being 'Dumb Pipe' Providers, The Smart Move For Partners Is To Add Value]

Sponsored post

Vessel is next in a growing line of content-related acquisitions Verizon -- as well as its carrier competitors -- are making. Aside from its Time Warner plans, AT&T in 2015 acquired DirectTV. Cable giant Comcast also acquired its behemoth media asset NBCUniversal in 2009.

Basking Ridge, N.J.-based Verizon in 2014 bought Intel's over-the-top video business unit OnCue for $200 million, which helped form the carrier's current Go90 platform. Verizon also bought AOL in 2015 and has a deal on the table to acquire internet content provider Yahoo.

By adding content to their portfolios instead of just offering the pipes to get to the internet, carriers will become more valuable to their customers and channel partners, said Andrew Gregoire, CEO of ACE Consulting Group, a Fairhaven, Mass.-based solution provider and Verizon partner.

"The carriers are starting to see that they need to have that diversity because they don't want customers to go to another provider," he said.

Solution providers should strive to offer their customers a "one-stop shop." Being able to offer programming, in addition to the pipes, will be a valuable add-on for some clients, especially businesses with waiting rooms that require cable packages, too, he said.

"There are so many different resources that [partners] have to have, and avenues to cover for a customer because you don’t want to expose them to someone else," he said. "There are many things businesses need that are not just pipes."

Vessel, founded in 2013, originally was designed as a hub for viewers to pay a monthly subscription for early access to videos from the top YouTube creators. The startup has raised more than $130 million in funding from various backers, including CEO Jeff Bezos.

Verizon will be acquiring Vessel's technology assets, but the carrier plans on shuttering the online service at the end of October. Verizon also plans on integrating Vessel's social features into some of its existing products, and could potentially use the technology to create subscription-based video content.

While Kilar won't be joining Verizon, Vessel CTO and co-founder Richard Tom, who also previously worked for Hulu as its CTO, as well as most of Vessel's employees, will join Verizon's Go90 business unit.

"Verizon … has made clear their convictions about the future of online video. 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," said Killar and Tom in a blog post on Vessel's website.