Since 2015 we’ve been hearing from Vimeo that it would, and then wouldn’t be doing a subscription service. But, in true “boy-who-cried-wolf” fashion, Vimeo today has gone on the record commiting to its own standalone subscription service that will bundle premium programming into a paid product. The announcement was made by IAC CEO and interim Vimeo CEO Joey Levin in a letter to investors earlier this afternoon.
It was Levin who also wrote to investors earlier this year stating: “On programming, we don’t intend to get into the multibillion dollar war on content. Our efforts here will be targeted…We will help some creators finance their content, and we will commission specific work that aligns with our audience based on consumption patterns, but we aren’t going to outspend the competition.”
On the contrary, now Vimeo is looking to do exactly that — build out and launch a new service that will stand separate from the prior-announced feature that enables individual creators to stand up their own subscription services via VHX, a technology company Vimeo acquired earlier this year.
The move is Vimeo’s answer to a complicated market position and to make itself relevant in an increasingly cluttered OTT and OVP market, clammoring to take a piece of a $500 billion TV and film business.
“Vimeo has the potential to be one of the biggest and most disruptive opportunities we’ve seen at IAC,” said Levin in the letter, underpinning why Levin and IAC Chief Barry Diller have been reluctant to sell the business to the various suitors, including GoPro (rumored), who have attempted to strike a deal to buy the video platform.
“The main differentiator between us and others at play in this new OTT market is that unlike all others who have to start from scratch, we begin with over a billion monthly video views, 115 million videos available, 240 million monthly viewers — over 100 million of whom are on Vimeo properties, 24 million of whom watch 3 or more videos on Vimeo per month, and millions of whom have already purchased content on the Vimeo platform from a Vimeo creator. Not bad for approximately $65 million aggregate investment into Vimeo, the vast majority of which built the SaaS business,” added Levin.
And for a business that has strongly avoided ad-supported models, subsciption was the obvious next step to capitalize on a video library that is far more premium than YouTube, which has also tried to power a standalone subscription service with YouTube Red. The service will stand on top of the TVOD and single-channel self-built subscription services as a complementary offering.
And to ramp up the offering, IAC is prepared to invest in acquiring and developing premium content for the middle market, in an effort to avoid inflated content budgets seen at Netflix and Hulu. As it’s done in the past, Vimeo will likely continue to support and empower the indie creative community as it has through deals with Tribeca Film Festival or on homegrown projects like “High Maintenence,” which was picked up by HBO.
“Ultimately, our goal is for Vimeo to drive millions of subscriptions and transactions for our creators while also growing a proprietary subscriber base with millions of consumers directly,” Levin said. “It’s the kind of moment that IAC looks for — we’ll do it our way by investing prudently yet aggressively. But now that the moment is here, we’ll most definitely take our shot.”