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Summary:

When it comes to online video, there are three companies that dominate the conversation – YouTube, Netflix and Hulu. But don’t overlook, IAC-owned Vimeo, the single most interesting video platform. A little boost from friends like Apple and Kickstarter, and suddenly it is starting to find growth.

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Kerry Trainor had spent enough time in large media companies to know that being chief executive of New York City-based video sharing platform Vimeo is a terrible idea. It is owned by Barry Diller’s IAC, a company that is the Internet equivalent of a used-car lot. And if that is not enough, Vimeo has had to live in the shadow of its much larger rival, YouTube, which is owned by Google.

But Trainor, who has worked for Yahoo, Forbes and AOL, is not perturbed in the least. He has signed on with one simple mission: to continue being the high-quality alternative for video sharing.

What Mac was to the PC, he wants Vimeo to be with the likes of YouTube. “What makes Vimeo different is that it is the high-quality platform for creative people,” he says. That quality, he says, is across the board — technical, user experience and even the video player. But most importantly, Trainor says, is the content. “The visual impact of the work and the narrative is very important to us as a company,” says Trainor.

Having become a cord cutter in 2007,  I turn to Vimeo when it is time for video entertainment. Not a day goes by when I don’t visit Vimeo, increasingly on my iPad. I watch the curated list of videos. I follow people I find creatively interesting. For me it is VH1, PBS, National Geographic, Independent Film Channel and Adult Cartoon Network — all rolled into one handy app. I like stuff, I share it with people via my Twitter feed or on my personal blog.

I have no such affection or loyalty for YouTube, which remains by the far the most dominant video platform in business. I will watch YouTube-hosted videos if someone shares them with me, but I can’t remember a single day when I typed YouTube.com and saw videos on their front page.

What makes Vimeo work is the curation of videos. The Vimeo team sifts through the submissions and picks out the best, which in turn encourages people to spend a lot of time on the front page (or in the app.) Better videos beget better submissions. “Creativity is something we focus on, and there is a core group of dedicated users who help us on this path,” Trainor says.

Capturing the Creator Movement

Vimeo was started in 2004 by Zach Klein and Jakob Lodwick as a side project while they were working on College Humor. Barry Diller, who acquired CollegeHumor in 2006, backed the new video sharing site in 2007. Vimeo was proud of its indie roots and the two co-creators weren’t afraid to say it. Here is what we wrote at that time of Diller’s announcement:

“YouTube has drastically shaped what kind of videos are being made,” says Klein. “We want to teach everyone that video isn’t just for lip-syncing Asian kids. That isn’t enforced by rules, but rather norms created by Vimeo’s users. The sleekly designed site is oriented around each user’s friends; most importantly, say the two founders, there’s no “most viewed” list anywhere to be found.

While Klein and Lodwick have moved on to new projects, that indie spirit remains. Sure, that stance has kept them in the shadows as online video has boomed. But lately, things have started to change for the company. It recently broke into the US top-10 online video destinations, according to eMarketer/comScore. According to its internal metrics, Vimeo had 75.3 million unique visitors in August 2012 versus 53.5 million in 2011 and 36.7 million viewers in 2010. Sure that is a pittance compared to Google video sites—the majority of whose traffic comes from YouTube. According to comScore, Vimeo had about 25 million viewers while YouTube had over 150 million viewers in August 2012.

These numbers are based on Google Analytics tool and are different from comScore/Video Metrics data.

So what has changed? They are no longer just for indie musicians and movie makers. The creator and maker movements sweeping the world have embraced Vimeo and are using it a platform to share their videos. More and more people are starting to use Vimeo for hosting videos relating to their projects and products, and they in turn are being shared on social networks, which helps Vimeo find much needed growth.  “Etsy, Tumblr, Kickstarter — they are simpatico with us, and that is helping the company,” says Trainor.

And what’s more — Vimeo is being offered as a default sharing option on Apple’s platform. The company has been quick to embrace all major mobile platforms including HTML5 and Google TV.

The Road Ahead

But will that be enough? The complicated structure of IAC makes it hard to figure out Vimeo’s revenues. What is clear is that they are a rounding error compared to those of YouTube, which is expected to bring in about $3.5 billion in 2012, according to Citigroup Research. Trainor understands the challenges. “One of the reasons I joined the company was it had a clear identity, and it is a single product company, which is flourishing,” he says.

For now, they are working on improving analytics and tools for publishers. The company, which charges for upgrades (Pro and Plus) and licenses music to video makers, is looking into new revenue sources. I wondered why it wouldn’t allow small publishers to place advertisements in the video and in the process become a competitor for Brightcove and Ooyala.

I have often felt that Vimeo would be better off as a separate company. In fact, about nine months ago, rumors surfaced that IAC was looking to spinoff Vimeo at a valuation of $300 million. Of course, nothing happened because IAC wanted to keep a big chunk of the company. Apple is another company that seems like a logical buyer for Vimeo. When I bring up these suggestions with Trainor, he politely moves the conversation in a different direction, reminding me that he is bullish on the growth of the business, otherwise he wouldn’t be here. Fair enough, but like Vimeo’s videos, I will be watching him.

  1. This is one of those sites I’ve been happy to pay for, for years. It’s not even that the premium gets me a lot, it’s just that I love the service so much that I want them to take my money.

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  2. Vimeo is default on Apple iOS for now, but…

    You can bet your bottom dollar that Apple will want to default to a video service that it controls itself. Most likely, Apple will create its own, or as a second choice, buy Vimeo. Either way, Vimeo can’t rely on Apple’s thru-traffic for very long.

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  3. I really like vimeo and the quality of the content the only challenge im facing is the bandwidth of my connection which affects my experience when viewing the videos. But with the technology improving year over year the experience improves too and i think that is the reason why youtube is successful due to a feature adjusting the resolution to compensate with bandwidth and experience.

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  4. This could be the alternative to Youtube within a year if Youtube continues to burn their users. Vimeo has always had the highest quality video in the space in terms of HD and the highest quality video for your browser so with all the new features what’s to say Vimeo can’t overrun Youtube in the next year or two?

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  5. OM, you need to take a look at the IOS app reviews for Vimeo….so much for being in touch.

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  6. Somewhere in the circles of hell, there is one called “YouTube comments”.. it’s YouTube USERS that many of us are running away from, running to Vimeo where we can make a serious short film and not get stupid, bitter, jealous, and uneducated comments.

    Vimeo has the best looking videos. YouTube’s resolution upgrade did not change that, they still look “soft” and professional film/video people won’t use it as their primary place to show off their work.

    If artists and musicians love it, the rest of the people will follow…

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  7. Ustream is the sleeping giant, similar to Skype in it’s quality, simplicity, and thoughtful UI/Apps. Yeah, I agree that Vimeo has mastered “quality” video…but not much else.

    I’ll stand upon my previous statement that any company that completely ignores feedback on the quality of their IOS and other apps is out of touch. Doesn’t the iPad have the most web traffic of any mobile device right now?….

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  8. YouTube has become sort of central for funny/silly videos, and I think more and more users realize if they want a serious forum for their videos, Vimeo is the place to be.

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