Online video streaming site vimeo is changing their game. After being free for everyone Vimeo is changing its strategy, not by making it a full paid service but giving the power to the video produces/uploader to have control over its video. Vimeo was never the biggest free channel for online video (41 mio unique viewers a month), that’s YouTube off course (156 mio unique viewers a month). Since Vimeo isn’t backed-up by Google (who owns YouTube), they had to rethink the business model to survive. This is what they came up with.
Vimeo states they want to empower its producers and videomakers. That’s way Vimeo is introducing 2 new features shortly, a ‘Tip Jar’ and ‘Pay-To-View’. Both features are controlled by the content up-loader, the first activates the up-loader to invite people to donate money/tips to the content up-loader/creator (85% of this money is for the up-loader, while 15% goes to Vimeo – transactional costs, as they call it). The latter feature gives the up-loader to the possibility to let the viewer pay per view. Both ways give the up-loader/producer/videomaker the chance to monetize their project.
Business Model of online video revisited
From a business model point of view Vimeo is searching for its unique place in between different online video suppliers like YouTube or NetFlix. One being the free one (funded through advertising), while the other is a full paid service (through a monthly fee). Business model wise it’s important so look for the added value served at the well-defined targeted audience. Vimeo wants to serve an audience that’s looking for independent quality ‘movies’ – away from home-made kitchen movies from Joe Sixpack or Jane Do, but without being a distribution channel for major Television shows or movies. Thanks to this ‘revenue’ model Vimeo hopes to avoid commercial messages in front (or over) its streamed movies, and start building a collaborative relationship with its uploaders/moviemakers.
The basic idea of this business model is great, and could connect a lot of well-defined video-makers with the targeted viewer audience. Vimeo aims to be the more qualitative version of YouTube serving a value finder audience (who wants to pay for quality content). Wether this audience is big enough, and wants to pay for the added value to support the Vimeo services (the famous 15% – remember) is the question? Since it’s not a fix income (no monthly fees are being paid), it’s hard to predict whether this model will survive in difficult times, without commercial support of traditional online advertising models…
Forbes Magazine – http://www.forbes.com/sites/jeffbercovici/2012/09/19/vimeo-dailymotion-court-filmmakers-in-youtubes-shadow/
The Atlantic – http://www.theatlantic.com/video/archive/2012/09/make-videos-get-money-vimeos-ceo-on-why-creators-should-get-paid/262557/
Image – http://www.pangealityproductions.com/home/power-web-online-video/vimeo/