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.