How Does Vimeo Make Money? The Vimeo Business Model In A Nutshell

Vimeo is a video platform established in 2004 by Jack Lodwick and Zach Klein as a side-project to the humor-based website CollegeHumor which helped them create Vimeo. Vimeo is a YouTube competitor, though it runs a different business model, not based on ads but rather on memberships and OTT video services.

Origin Story

Vimeo is a North American video platform headquartered in New York City.

The company was established in 2004 by Jack Lodwick and Zach Klein as a side-project to the humor-based website CollegeHumor. Lodwick and Klein received inspiration for Vimeo after noting the popularity of certain types of videos on CollegeHumor.

During the next few years, Vimeo took a back seat as the pair focused most of their efforts elsewhere. However, the Vimeo user base did begin to gradually increase through word-of-mouth advertising.

After media company IAC acquired majority ownership of CollegeHumor parent company Connected Ventures, it discovered Vimeo. Around the same time, Google had famously acquired YouTube. As a result, IAC directed Lodwick and Klein to focus on Vimeo. It became the first video sharing platform to offer high-definition content.

In recent times, Vimeo has focused on providing more support to its content creators. They can now use collaborative tools to privately share videos and receive feedback tied to individual frames in each video. Vimeo also acquired AI-backed video creation service Magisto in 2019 to help its less experienced users produce professional videos.

Vimeo revenue generation

Unlike competitors such as YouTube, there is no advertising in Vimeo video content.

YouTube is the most popular online video platform, a hybrid between a video search engine and a social media platform with a continuous feed prompted by social interactions and engagement. In fact, the platform is so popular that is the second most visited website on the internet. After being acquired by Google in 2006 for $1.65 billion, the platform now boasts over 2 billion registered users. Collectively, these users upload 500 hours of video every minute. The platform competes with other video engines like Vimeo, Dailymotion, and social platforms like IGTV, TikTok, and Twitch.

Instead, the platform makes money in several other ways.

Vimeo creator membership

In addition to the free plan Vimeo Basic, creators can sign up to four paid plans:

  1. Vimeo Plus ($7/month) – with 5 GB of weekly bandwidth and 250 GB of annual storage for a single user. Features not available in Vimeo Basic include privacy controls, social distribution, and player customization.
  2. Vimeo Pro ($20/month) – with 20 GB of weekly bandwidth and 1 TB of annual storage for three users. Vimeo Pro has everything from Vimeo plus in addition to custom video templates, streaming, and the ability to publish unlimited videos. Access is also granted to unlimited use of licensed music and stock photography.
  3. Vimeo Business ($50/month) – with no weekly limits on bandwidth and 5 TB of total annual storage for 10 users. Premium comes with SEO, analytics, and lead generation tools. It also enables video creation with custom branding.
  4. Vimeo Premium ($75/month) – for unlimited live streaming and users with 7 TB of total storage for a maximum of 10 users. Features are streaming-centric and include unlimited live events, multiple destination live streams, audience chat, and live graphics and polls.

OTT video service

Over the top (OTT) describes film and television content provided via the internet and not delivered by a cable or satellite provider.

Vimeo also provides three paid plans for OTT businesses called Vimeo OTT (formerly Vimeo On Demand):

  1. Starter – charged at $1 per subscriber per month and providing the basics for starting a web-based OTT channel. Processing fees may also apply.
  2. Growth – charged at $500/month per app and renewed annually. Bulk discounts may apply. The Growth plan includes everything in Starter plus dedicated account management, free migration, branded apps, and dedicated support.
  3. Enterprise – prices available on request. This is ideal for large enterprises who require live streaming, DRM, free-to-view registration and AVOD, and API or SDK support.

Key takeaways:

  • Vimeo is a North American video platform created by Jack Lodwick and Zach Klein. The idea for the platform came after Lodwick and Klein noticed that certain humorous videos received more views on CollegeHumor.
  • Vimeo was the first such platform to provide high-definition video content. To differentiate itself in the market, it also offers a range of machine-backed tools to help creators edit and produce professional video content.
  • Vimeo makes money through paid subscriptions. There are four Vimeo creator membership options with various levels of storage, bandwidth, and functionality. Vimeo OTT also allows aspiring businesses to launch their own channels.

Read Next: How Does YouTube Make Money, How Does Twitch Make Money, How Does TikTok Make Money, How Does Instacart Make Money.

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