How Vimeo shifted from being a YouTube alternative to a $160m B2B player
Following a year in which Vimeo did $160 million in revenue, the IAC-owned video company is courting more advertisers and media companies to join the list of video creators and various businesses that use its video player and technology services.
Today, Vimeo is nearing 1 million paying subscribers for its video software services business, according to Vimeo CTO Mark Kornfilt. That software services business has become a huge growth area for the company, accounting for a “vast majority” of Vimeo’s revenue, according to a letter to shareholders from IAC CEO Joey Levin earlier this year. Ninety-nine percent of Vimeo’s subscribers are on the self-serve software, the company said.
“The reality is that many people still see us or think of us as a YouTube competitor — or for some people who have followed our progress, perhaps a place where filmmakers come to put their content,” said Kornflit. “We are now entirely focused on providing tools across the various areas of the video workflow for creators.”
In 2017, Vimeo made a major strategic shift from being a destination where people came to watch high-end videos, to a software provider for video makers of all sizes and types. Vimeo’s focus is capturing a larger share of a $20 billion market for video hosting, distribution and monetization. And this means being useful for a customer base that can include every type of video producer, from a social media star or media company publishing to various social platforms, to a yoga teacher streaming live video, Kornfilt said.
Vimeo offers four subscription tiers, ranging from the Plus package at $7 per month to the Premium tier for $75 per month. The company declined to break out, in terms of percentages, how many of its customers subscribe to the different tiers. But at nearly $160 million in overall annual revenue and close to 1 million paying subscribers, Vimeo would be making roughly $13.33 per month per subscriber if all of its revenues came from its software subscriptions.
Looking ahead, Vimeo sees growth opportunities with video makers interested in launching subscription services. Beyond its core software product for video makers, Vimeo also offers an OTT product that allows customers to spin up subscription streaming channels. That product is being used by more than 1,000 OTT subscription services, the company said.
“It’s across the board; we are seeing content owners of all sizes coming online through us and going direct to consumer,” Kornfilt said. “It’s a trend that we are going to see continue over the next couple of years as these media properties and publishers get a grasp on their ability to spin up these services, frankly, quite easily.”
While small businesses are the fastest-growing customer segment, according to Kornfilt, top marketers such as Red Bull, Unilever and the NBA are also using Vimeo products, the company said.
Vimeo’s efforts to get in front of more publishers, marketers and other business owners have included an ad campaign featuring cheeky out-of-home placements promoting what Vimeo can and can’t do for video creators. The $10-million campaign has included pre-roll ads on YouTube promoting Vimeo’s ad-free video player.
One of the newer feature sets, introduced in early 2018, is the ability for Vimeo subscribers to publish natively to social platforms including Facebook, YouTube and Twitter, “with one click,” said Kornfilt.
This creator-centric approach, which also included offering tools such as live streaming and support for HDR video, helped Vimeo grow its bookings by 30 percent in the second quarter of 2018, the company said. And with 90 percent of Vimeo subscribers on annual plans, according to Vimeo, the company hopes to create enough stickiness where it can routinely grow revenue by 20 to 30 percent, said Levin in his shareholder letter.
Subscribe to the Digiday Video Briefing: A weekly email with news, quotes and stats around the modernization of video, TV and entertainment.
Member ExclusiveFuture of TV Briefing: 5 takeaways from this year’s TV upfront market
The Future of TV Briefing this week recaps the top trends from this year's TV advertising upfront negotiations and what they portend for the next year.
Member ExclusiveFuture of TV Briefing: The free, ad-supported streaming TV market has come of age
The Future of TV Briefing this week looks at how the free, ad-supported streaming TV market has entered a new era in its maturation.
Four years after its premiere, NBC News’ ‘Stay Tuned’ has stayed the course on Snapchat
The twice-daily news show averages nearly 1 million unique viewers per episode, and 50% of its audience tunes in at least three times per week.
SponsoredHow the ad industry can use its borrowed time to future-proof first-party data solutions
Trent Lloyd, co-founder and head of brand solutions, Eyeota Google’s updated timeline for its Privacy Sandbox rollout, including its two-year delay of third-party cookie deprecation on Chrome, didn’t come as a surprise to many industry observers, given the limited utility of Google’s FLoC and the slow momentum of the Privacy Sandbox in the World Wide […]
Member ExclusiveFuture of TV Briefing: How Amazon, Roku and YouTube stepped up in this year’s upfront market
The Future of TV Briefing this week looks at how the competitive playing field between Amazon, Roku and YouTube versus traditional TV network owners for advertisers' dollars changed in this year's upfront market.
All Def owner Culture Genesis snags $5M in revenue after gaining YouTube ad sales rights
The digital studio claims to be the first Black-owned media company to have secured the ability to sell its YouTube channels’ inventory directly to advertisers.