Vimeo is thriving as the anti-YouTube. Here’s the CEO’s plan for the future

Posted at 8:45 AM, Jun 26, 2019
and last updated 2019-06-27 07:47:18-04

Vimeo CEO Anjali Sud really wants people to know that the online video company is no longer a competitor to YouTube.

“Today we do not view YouTube as a competitor. We really think of ourselves as a software-as-a-services company like a Slack, like a Dropbox, like a Zoom,” Sud said. The three publicly traded business software companies offer storage and collaboration tools for businesses.

Sud acknowledged that for most of the company’s history, Vimeo was a “viewing destination” like YouTube.

“We were sort of the more indie, higher end, more artistic version of YouTube,” she said. “That’s probably how most people think of Vimeo,” Sud said in a recent interview with CNN Business.

But the company, which was founded in 2004 and bought by internet conglomerate IAC in 2006, is now taking advantage of the explosive growth in digital video through its video sharing, live event streaming, marketing and analytics tools.

In 2017, the company abandoned plans to start its own subscription video on demand service and pivoted away from original content.

The challenge for Vimeo is getting potential customers to understand its business model.

Vimeo isn’t dependent on ads

Sud said Vimeo does not make money from advertising like Google’s YouTube and many other media sites. So she’s not concerned about traffic, viewing hours and other metrics that matter more to marketers.

“What we offer to creators is the ability to have a successful video strategy,” Sud said. “We now view YouTube as a partner, not a competitor,” she said, adding that the company also works with Twitter, Facebook, Instagram, LinkedIn and other social media sites.

It’s a strategy that’s paying off well for the company. Vimeo reported revenue growth of nearly 25% in the first quarter and now has just under a million paying subscribers for its tools and services.

Sud joined Vimeo in 2014 as a director of marketing, following stints at both Amazon and Time Warner, the predecessor company to what is now AT&T’s WarnerMedia — the owner of CNN. She was promoted to CEO in 2017.

After she took over the top spot, she doubled down on Vimeo’s focus on helping creators make money from their videos — and that isn’t just about trying to help wannabe YouTube stars.

“It used to be that video was for Hollywood studios and media professionals. Now, the next phase is small businesses needing to market and communicate with video for social media,” she said. Yoga instructors and churches are working with Vimeo, for example.

Creating an online video strategy for small business

“Small organizations desperately need to communicate with video but they have no idea how to do it. They’re not a filmmaker. They’re not an agency. They’re trying to grow their business,” Sud said. “But in five years, every small business should have a video strategy.”

To help small businesses, Vimeo recently acquired Magisto, an artificial intelligence startup founded in Israel that makes editing and production tools for short-form videos.

“People are building their own online video networks,” Sud said. “They are creating thriving businesses online to go direct to their audience and customers. You don’t have to be a Hollywood studio or Netflix or Hulu or Amazon to have your own channel.”

Last year, Vimeo also launched a stock footage marketplace of online videos — similar to what Getty Images does for photos — that small businesses can use in marketing videos. That helped bring in more licensing revenue for Vimeo.

Possible IPO down the road?

But Vimeo is still losing money as the company continues to invest in new services. IAC broke out Vimeo’s results as a standalone business for the first time in February.

That breakout could be a precursor to an eventual spin-off of Vimeo into a separate publicly traded company down the road if it’s able to show it can become profitable.

IAC, under chairman and senior executive Barry Diller, has a history of taking subsidiaries public.

Sud jokingly referred to IAC as an “anti-conglomerate.” It spun off travel site Expedia in 2005 and did the same with Ticketmaster and HSN in 2007. Ticketmaster is now part of Live Nation while HSN eventually merged with home shopping rival QVC to form Qurate.

More recently, IAC spun out Match, the dating service that also owns Tinder, in 2017. IAC also bought Angie’s List that year and merged it, along with other real estate subsidiaries, into a separately traded company called ANGI Homeservices.

Sud suggested that IAC could eventually spin off Vimeo as well.

“IAC has a clear track record, a playbook of working on building a leader in a specific category and ultimately spinning it out as a standalone business,” Sud said. “That is a strategy we are enacting with Vimeo.”

But Sud said the company doesn’t need capital right now. And she conceded it may take more time for investors to appreciate that Vimeo is not a media company like YouTube. There still is the misconception that Vimeo is a place to go to watch online video.

“Most startups have a brand awareness challenge. Nobody knows who they are. For Vimeo, we actually have to change awareness,” Sud said.