Rethinking the business model – Vimeo let’s its viewers tip and/or pay to watch a video

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…

Sources:

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/

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24 comments on “Rethinking the business model – Vimeo let’s its viewers tip and/or pay to watch a video
  1. Hans Francken says:

    I would never pay to watch a video online.. I believe the chances are that those videos will be copied to youtube eventually.

  2. Helsen Jonas says:

    I would also never pay to watch an online video. However, I think that there are people that actually would pay for this. People that want quality, are willing to pay for it. For example: real music-lovers buy CD’s, they simply don’t download illegal (we asked this in class). I think vimeo has another advantage: it’s alternative quality. It just doesn’t feels like another video-sharing site, like Youtube. I think we just have to wait en see the result with our own eyes…

  3. Sascha Boden says:

    I think it´s pretty risky to use this model. As you already said, it´s hard to find enough people financing this. There may be a group of people who want to watch high quality videos and are willing to pay fo that. But is this group really large enough to keep business alive? Iam myself sometimes on vimeo, watching great online movies in HD quality. But woul I pay for it, if there would be a possibility to donate or if I could not watch the video at all? Maybe in 1% of the cases. When it comes to online videos we have the same phenomena as with music – less and less people are willing to pay for it. So I can only hope that they find enough people and get them aware of the situation. It would be a shame if this platform would disappear, but still, I would spend my money on other things.

  4. M.Kux says:

    Its feels like the business models in the internet are changing. Websides which offers a free service like free videos or news finance themself through adds. this create a dependence (as we saw by facebook). Specially webpages which offers news often use a new paing system. Vimeo follow this model to survive and I think its a got model. As you said its not a full paid services so as a vimeo customer you still have the chance to see high quality movies for free. Furthermore Vimeo give the descision away to the video producer. They have the choice if they want that the people pay for the videos. So vimeo give a kind of desicion freedom to the producers. If they demand money less people we see their work so the producer are in a desicion dilema.

  5. Mats Blankers says:

    I doubt that people would pay to see a video on the internet. I think, someone who thinks he gets more quality by paying to see a video, will pay monthly. The group who wants to pay a few times to see a video will be small. There are a lot of videos on YouTube and they aren’t all amateurish. You have to create something totally different to gain a stable market position and nothing in between.

  6. I dont believe this model will work in the current atmosphere of illegal streaming and downloading of movies music and video’s. You can almost find anything online without any effort and without spending any money.

    I think youtube will continue to be the market leader because it’s free even tho it will lose a few users with all the commercials they have implemented. Free video’s with commercials are still better than payed video’s without commercials especially in times of crisis!

    It’s important to realise that the customer is king whatever happens you can’t just expect them to stay on a platform if you overload them with commercials or expect them to pay for something, they will just move to another platform that offers them a better deal 🙂

  7. Denis Vandepitte says:

    I think the new ‘tip jar’ feature was a great idea to sponsor students in their work. The ‘pay to view’ feature however is a bit useless.. There are countless ‘illegal’ programs on the internet, for free, meant to download videos from youtube. The same applies for Vimeo. That way videos for which you normally would have to pay, will be spread free to download.

  8. petervankeer says:

    Wow, never thought ‘Vimeo’ was so popular (41m views a month)… I think that the ‘Tip Jar’ is a VERY good idea! On the other side, the ‘pay to watch’ thing is maybe a bit too much, beauce people can ‘abuse’ it I think.. Youtube should defenitely includ the ‘Tip Jar’ too (I don’t know if they’re permitted though). I could be a real succes for people who post tutorials e.g…. I’ve already seen hours and hours and hours of videos where I look for a certain answer. I often find one on Youtube instead of blogs or so. I really would tip 1€ or so for a good (!) tutorial, so that people get rewarded for i! Good job Vimeo!

  9. We did a presentation about Vimeo for Edwin De Vuyst (English 2). Actually Vimeo has quite a good business model. It’s quality, pixel as well as content, is so much better then on YouTube.

    The only thing about the Tip Jar is that you need to be a Pro-user. Wich means you need to pay first to get paid. So when you’re a Plus user (cheapest “pro”account) you pay 50$ a year wich means you’ll have to get serious tipped to even get a break-even.

  10. Didier Van Hove says:

    I personally have no problem with banners or advertisements on YouTube videos. Admitting it might be annoying sometimes, but you can click it away or use some Ad Blocker software. I would never pay for something on the Internet, as I am of opinion that, because you already pay for the connection, most of its content should be free. If you have to pay for it, I would love to have a legal copy of it and not repay every time for it. And still then, it will have to be something really special before I’ll do this. In the end, most of those artists make already a decent living and will have more than we can ever wish for. So some things just must be free, as a motivation for them to keep on going in the entertainment business.

  11. I am a frequent Vimeo-user. The quality of the videoclips always surpasses Youtube’s quality. I think the ‘Tip Jar’ is a good idea and could work for Vimeo. Not merely famous, experienced video producers can see the advantage. The commentaries on Vimeo are more positive than YouTube that’s a reason I think the ‘Tip Jar’ could be successful. The ‘Pay To View’-function will be used, in a smaller group. I would not pay quickly to view a video, surely not an official music clip. Because of the internet nowadays, you can view, stream or even download the movie somewhere like Maximiliaan said. Nevertheless, I remain a fan of Vimeo and the new Business Model!

  12. pauwelsnick says:

    I don’t believe in this business model because you can view stream or download the movie that you want to see. There’re always people that will pay but I think that would be people that don’t know a lot of downloading or streaming. Youtube has lost users because there commercial video’s but people would not pay if you can see it for free with a commercial video on youtube. There’re people that will pay for quality but i think i would be a success.

  13. After seeing the presentation about Vimeo, I think it is actually better than Youtube. Especially when you are looking for quality video’s. But thing that bothered me about Vimeo is the same thing that Cédric already mentioned is that you have to be a pro-user to use the Tip jar, so pay to get payed, and I don’t think people will pay a tip 50$ to watch a video, so it will be very hard for users to make money on vimeo. These people put a lot of time and effort in making quality video’s and most of them also want to make a bit of money because of this ,the tip-jar isn’t a good system for the users.

  14. Geoff Hendrickx says:

    I think it’s a weird business model . For me it’s not effective because who wants to pay for a small video, which you can probably watch for free on YouTube. What I do like in this model is the ‘tip-jar’. It’s good for persons who post tutorials on the site and you are really helped. You have got the choice to give the person a small tip or nothing at all.

  15. Nicholas bellon says:

    There are a lot of people out there who appreciate good work and who are willing to offer their voluntary contribution to it (both to the uploader as to Vimeo for the quality and service). For example ; the Reddit community often does this for projects who they believe are worthy of their monetary boost.

    Vimeo offers a free app on the App Store. You can watch, share and create Vimeo videos on the go. The developers have designed this app very professional and user friendly at the same time. For example this small pop-up reminder to tilt your screen for optimal quality (http://i.imgur.com/ml2hC.jpg).
    In contrast to YouTube, Vimeo has integrated recording in their app. Users will be content about the service of Vimeo and therefor wouldn’t mind so much sponsoring 15% of their donations to the company.

  16. Devin Hendrickx says:

    I think this is a smart move of Vimeo. For me Vimeo is the place to be for a lot of short films. I believe some people are definitely willing to pay for those short films. Like still people are willing to pay for regular movies.

  17. Monaa says:

    I find it a little bit stupid that vimeo did this. They should at least know a bit better. Who would pay to watch an online video? At least i wouldn’t.. If you are smart enough you know they are many more other different ways to watch a movie..

  18. Ernest Nwanu says:

    I think it’s a wonderful idea. I really do enjoy Vimeo a lot more than I do Youtube. This is because of its gorgeous interface. I doubt if this recent move will bring in a lot of revenue, however I am curious.

  19. Vince Campforts says:

    It might be time for some change! YouTube has been on top for to long. For now, with all the current situations, I don’t think this business model will work out.

  20. I think the ‘tipjar’ is a good idea, you can donate whatever you want, which is positive, because people don’t like paying for videos on the internet. But the quality on Vimeo is a lot better than on Youtube, so it is worth it. I’m sure there are people out there who will pay for a video if it is really stands out. Also it is the uploader that gets 85% of the money, so he earns! This will lead into better and more videos. This might inspire upcoming talents to put more effort in them and to ‘present’ their work for feedback, with the possibility of getting some money for it.

  21. Petra Schachenhofer says:

    I am wondering if this new approach works. Vimeo has to differentiate itself from the other video plattforms. It will definitely help to distinguish between qualitative and non qualitative videos but I am sceptical that a lot of people are going to watch those if they have to pay for it each time watching the videos. Vimeo needs to offer its watchers an added value for which they are going to pay for. Let’s see …

  22. Alexander Ceulemans says:

    As I read in previous comments Vimeo has to differentiate itself from YouTube. Vimeo is a powerful concept and has possibilities to grow but it seems they still haven’t found their way. The high quality videos are eye candy compared to YouTube and the amount of crappy worthless videos is very small. I don’t think asking a payment for videos is the correct business model, simply because nobody wants to pay for a video, not even for a high quality video. I hope Vimeo finds it’s way…

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