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Music Rights Worry for Vessel

About a year ago, Vessel approached a cappella cover artist Peter Hollens about joining the not-yet-launched video platform. The site, which offered an upfront payment, hoped to attract the singer and his one million YouTube subscribers.

But Mr. Hollens chose not to sign. One reason was his concern about music publishing rights, which he needs to perform other people’s music on his videos. YouTube has a pre-existing deal for most of those rights for programs like his on its site but he’d be responsible for negotiating the deals if he went to Vessel, says a person familiar with the situation, a time consuming task. The company approached other popular performers who did not sign over these same concerns.

Vessel was launched earlier this year by former Hulu CEO Jason Kilar, an effort to develop a paid-subscription alternative to YouTube. Meanwhile YouTube on Wednesday detailed its plan to offer an ad-free subscription tier for $9.99 a month.

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“YouTube could get a U.S. publishing deal from the big guys—Sony, Universal, etc—because they were big enough and the music industry needed them. I think it’s really hard if you were starting a company,” Mr. Forssell said. When Hulu began taking on user-generated videos it also had to go through a period where it negotiated individual deals with the publishers over copyrighted music in the background of videos.

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Recently executives from Vessel have been privately expressing concern that the site’s lack of music rights are an ongoing problem.