Vimeo is preparing to take on Netflix, Amazon, YouTube and others with the launch of its own consumer-facing subscription service, the IAC-owned company announced on Wednesday as part of its earnings report. In a shareholder letter, Joey Levin, IAC CEO and Interim Vimeo CEO, detailed Vimeo’s plans to more broadly compete in this space, while also differentiating its service from existing subscription players.
The company’s plans to enter this space were telegraphed earlier this year when it acquired VHX, a platform for premium, over-the-top subscription video.
Vimeo’s advantage in this market, Levin said, is that it doesn’t have to start from scratch. The video network today has 115 million videos and over a billion monthly video views, from 240 million monthly viewers. 24 million of those viewers are highly engaged, watching 3 or more videos on the service each month. And millions have already bought content from Vimeo creators, he said.
To date, consumers have been able to pay for creator content in a variety of ways on Vimeo – they could pay for the video directly or offer a subscription, given the creator’s choice, for example. Creators could also distribute videos for free, in an effort to grow their audience.
Because of Vimeo’s built-in monetization tools, it has attracted a community of emerging filmmakers, editors and directors who share their content on its site. And this, in turn, fuels Vimeo’s belief that it won’t have to fund content development at the same level of larger players, like Netflix – instead of billions, it can spend just millions, said Levin.
In terms of its investments in video content, Vimeo to date has more strategically seeded its network by funding select shows, films, concerts and specials, as part of its Vimeo Originals initiative. One of its web series, “High Maintenance,” was also picked up by HBO, and three out of four Oscar nominees for shorts are from directors on Vimeo. It also received its first Emmy nomination this year for “Garfunkel and Oates: Trying to be Special,” one of its own Originals.
As Vimeo begins to experiment with its own proprietary subscription services, it will clearly face a lot of competition. This includes the larger players on the consumer side, like Netflix, Amazon, Hulu, YouTube and others, noted Levin, but also on the SaaS side, as with MLB’s streaming technology platform BAMTech, of which Disney now owns a 33 percent stake.
In particular, Vimeo is often positioned as a YouTube competitor, given that both networks allow for free video sharing and cater to a creator community.
YouTube has tried to branch out into subscription services in recent months, as well. However, according to a recent report from The Verge, its YouTube Red subscription offering is struggling to acquire paying customers. Of its 1.5 million subscribers, 1 million are still on trials, the report said.
Vimeo may not face the same resistance, though, because it has already established itself as a place to pay for content.
Levin didn’t get into the financials of Vimeo’s larger business model and how it compares with today’s major players. Instead, he noted that its profitable core SaaS tools business generates more than $75 million in revenue, but overall Vimeo’s business loses money and near-term profitability not the priority.
The goal, he said, is to drive “millions of subscriptions and transactions for creators,” while also growing a subscriber base of “millions of customers directly.”
“Vimeo has already spawned a community and marketplace that is producing valuable content, attracting a massive audience and getting consumers to open their wallets,” wrote Levin in the shareholder letter. “Now we need to fuel this system with marketing, programming acumen, product innovation and the raw energy and unbridled ambition of a disrupting start up to take a share of the $500 billion TV and film market,” he added.
Along with the news of its subscription video plans, Levin said Vimeo is in the middle of a redesign of its service’s consumer experience, which will bring together Vimeo Originals, its library, and the creator marketplace into a more comprehensive offering.