Vimeo is looking to take a slice of the video subscription market by launching its own consumer-facing subscription service and developing original content, the interim CEO of Vimeo Joey Levin announced this week via an earnings report.
Levin said Vimeo won't be spending the "billions" of dollars that services like Netflix have on producing original content -- in September, Netflix announced it was targeting for 50 percent of its content to be original programming. Vimeo's plan is to help its creator community develop original content and supplement it with licensed programming.
"Vimeo has the once-in-a-generation opportunity to, following in Netflix's footsteps, deliver compelling subscription viewing experiences for consumers in the market for pay TV," Levin said in a shareholder letter.
Levin added that Vimeo will be able to run this unnamed service at a "fraction of the cost" of its competitors, as it will be able to leverage its existing community of content creators and viewers.
The video-sharing platform features 115 million videos and generates over a billion monthly views from 240 million viewers monthly, according to the earnings report.
"Now we need to fuel this system with marketing, programming acumen, product innovation and the raw energy and unbridled ambition of a disrupting startup to take a share of the $500 billion TV and film market," Levin said in the shareholder letter.
High Maintenance, one of Vimeo's original series,aired on Vimeo for two seasons before HBO picked it up earlier this year. Three out of the four of this year's Oscar nominees for shorts are from Vimeo-participating directors, Levin said, and the company also won its first Emmy nomination this year.
While Levin acknowledged that the company appears to be competing with larger entities like Netflix, Amazon Prime, Hulu, HBO Now, and other subscription-based TV and video content services, he said Vimeo's subscription service would be aimed at the indie crowd which make up much of the video site's community. The offering will therefore be more comparable to that of Vrv and FilmStruck.
"Unlike other video platforms which focus on building celebrities and influencers, Vimeo is home to the world's best behind the camera talent -- emerging filmmakers, editors, and directors," Levin said in the shareholder letter.
To date, Vimeo users have been paying for video content through rentals and one-off purchases as well as subscriptions, which was introduced mid last year. The new subscription service will give subscribers access to some of the paywalled content currently available through the Vimeo On Demand library.
In May this year, Vimeo, which is owned by Barry Diller's IAC, acquired VHX, a platform for premium over-the-top subscription video channels. The company will now be able to make use of VHX's subscription video tools that accommodates creators of all sizes from individual producers to larger media companies.
Levin acknowledged that Vimeo faces tough competition and notes that the site is still losing money, but said that profitability is not the near-term goal for Vimeo.
In Q3 of 2016, Vimeo reported revenues of $60 million, compared to $60.1 million from the same quarter last year. However, in the same 12 month period, operating loss decreased 53 percent from $5.7 million to $2.7 million and the adjusted earnings before interest, taxes, depreciation, and amortisation loss decreased 83 percent from $5.1 million to $0.9 million, according to the earnings report.
It is uncertain when Vimeo's subscription service would be launched.
YouTube has also tried to branch out into subscription services in recent months with the launch of its YouTube Red subscription. A recent report, however, suggests that the YouTube Red subscription offering is struggling to convert users to customers, with 1 million of its 1.5 million subscribers still on trials.
In addition to Amazon Video and Prime Video, Amazon launched an online video service rivalling the Google-owned YouTube called Amazon Video Direct -- which allows content creators to upload footage and earn royalties.
Rather than paying contributors based on ad impressions for standard accounts -- or pay-per-view through the ad-free YouTube Red subscription service -- Amazon Video pays content creators based on hours streamed by Prime members, rental revenue shares, purchases, monthly subscriptions, or ad impressions.
The online retailer also made its streaming video platform Amazon Prime available as a standalone service for $8.99 a month -- a dollar less than the monthly fee charged by Netflix.
Update: Amazon rebranded Instant Video to Amazon Video, and so an amendment was made to the article.