The Vimeo Playbook: Grow like Pro
Discover how Vimeo achieved a remarkable “Revenue per User” in a competitive market. We will discuss Vimeo’s strategic moves, from niche market focus and innovative product features to partnerships.
Back in 2019, I was working on building a training platform. I was stuck for 2 weeks during the launch.
I needed a place to safely host our training videos where we could customize them with our own branding, add watermarks, and keep them private.
After searching on Google for a few days, I found Vimeo.
Exactly what we need → “Cost Effective, Secured, Private, and Enterprise Grade”
I was always curious about how Vimeo, a video platform, could compete with YouTube and still be popular for certain use-cases.
Now, five years later, I decided to do some research and write about Vimeo's journey. Here's what i have covered in this newsletter:
- Highlights of Vimeo’s Journey
- Challenges They Faced
- Growth Strategies
- Impact : Revenue Per User
- Learnings
Highlights of Vimeo’s Journey
User Growth: Vimeo's user base grew from 260 million in 2022 to about 300 million by the end of 2023.
Paid Subscriptions: By the end of 2020, Vimeo had over 1.5 million paying customers. Their main focus was increasing paid subscriptions and revenue per user (which grew from $205 in 2020 to $243 in 2021)
Revenue Growth: Vimeo's revenue expanded from $57 million in Q1 2020 to $89.4 million in Q1 2021, a 57% gain. Overall revenue reached $433 million in 2022.
Profitability: Vimeo achieved positive net income in Q1 2021 due to a one-time spike.
Market Share: As of February 2024, Vimeo holds 4.1% of the market, and that too in a competitive landscape dominated by giants like YouTube and Netflix.
In its early years from 2004 to 2010, Vimeo started as a niche platform for independent creators, prioritizing quality over quantity. Their focus on high-quality content initially limited market share but successfully built a loyal user base.
As Vimeo entered its growth phase between 2011 and 2015, they introduced paid subscription models and features like "Staff Picks" to attract more users and increase its market presence.
The COVID-19 surge in 2020 saw a significant rise in video consumption, with Vimeo adding 25 million users in just a few months, boosting its market share. Overall, They reached approximately 300 million users by 2024
Key milestones that shaped Vimeo's growth during its early years:
2006: IAC acquired Vimeo for $26 million as part of the Connected Ventures purchase, which also included Collegehumor. This provided Vimeo with the necessary resources and support to grow.
2007: Vimeo became the first video site to support HD video, highlighting its commitment to quality.
2008: Introduced the "Plus Package" paid subscription model, enabling monetization beyond advertising.
2013: By December, Vimeo had over 100 million unique visitors per month and more than 22 million registered users, with 15% of traffic coming from mobile devices.
2014: Continued to grow its user base, fostering a strong community of indie filmmakers and fans, known as "Vimeans".
During this period, Vimeo transitioned from a simple video-sharing site to a platform dedicated to serving video creators. They introduced features like "Staff Picks" to highlight great content and creators, helping Vimeo differentiate itself from YouTube.
2020: The COVID-19 pandemic led to rapid growth, with Vimeo adding 25 million users in seven months, reaching 200 million registered users by November.
2021: Before going public, Vimeo had approximately 1.6 million paying subscribers
Challenges They Have Faced
Vimeo launched in 2004 with a bold vision:
to provide an advertising-free platform for video sharing.
The founders, Jake Lodwick and Zach Klein, aimed to create a community-oriented space that prioritized user experience, particularly for independent creators.
Initial Struggles
Market Competition: Vimeo faced intense competition from YouTube, which dominated the video-sharing landscape. Attracting a broader audience who was already engaging on Youtube was a constant challenge.
Monetization: Establishing a sustainable revenue model was tough. Vimeo relied on a subscription service, which was less appealing compared to ad-supported platforms.
Content Variety: Focusing on independent creators limited Vimeo's content variety, making it harder to compete with larger platforms offering a wider range of videos.
These initial challenges pushed Vimeo to continuously evolve its strategy, eventually shifting towards a software-as-a-service (SaaS) model to better serve video creators and businesses.
Scaling Struggles
As Vimeo grew, it faced several significant challenges, particularly in converting free users to paid subscribers.
Abandoned at Onboarding: Many free account users abandoned their first video upload, a crucial step for converting them to paid subscriptions.
Ineffective Tracking: It was difficult to pinpoint the exact moment users dropped off during the upload process, hindering targeted intervention.
Generic email campaigns did not resonate with users. This resulted in poor engagement and conversion rates from free accounts to paid trials.
Ongoing Struggles
Beyond the initial and operational challenges, Vimeo also faced broader market challenges.
Competition: Constantly standing out and maintaining position in a crowded market dominated by giants like YouTube and Netflix.
Vimeo maintained a niche focus on quality content and creator tools, building a loyal user base despite the competition.
Transition - Shifting from a video hosting platform to a SaaS model with premium tools for creators and businesses involved significant operational and marketing adjustments.
The Growth Funnel
Acquire → Activate → Retain → Convert
Primary challenges they were facing
Activating Users as drop offs are happening at first upload
Retaining Users as it was difficult to bring them back
Acquiring Users due to high competition
Partnerships - Solution to Activate and Retain Users
The first problem they needed to solve was “How to prevent drop-offs in activation?”.
They partnered with Simon Data and Salesforce Marketing Cloud to fine-tune the onboarding process and boosted trial conversions.
Here’s what they did:
Abandonment Tracking: Vimeo utilized Simon Data to pinpoint the exact moment users abandoned their first video upload. This step was crucial for sending timely reminders to login and complete upload and converting free users to paid trials.
They sent personalized email reminders just 6 hours after abandonment, instead of the usual 24 hours, and achieved a 300% increase in conversions to free trials.
Simon Data’s integration with Vimeo’s Snowflake data warehouse gave the marketing team comprehensive insight to dynamic user segments based on real-time behaviors. They streamlined data-backed workflows and were quick to make any campaign adjustments.
Simon Data provided Vimeo with the tools for real-time data access, audience segmentation, and experimentation. This partnership resulted in a 300% boost in trial conversions and improved overall retention by engaging users more effectively from the start.
Vimeo has also strategically acquired multiple players to add growth muscle. Here are a few:
Before i get into acquisitions, one thing that is interesting to see here is --
Somehow they were always ahead of time in bringing features.
Livestream (2017)
“Why just videos, let’s get into live streaming?”
Vimeo acquired LiveStream and expanded their offerings in live streaming services. This step attracted more users and businesses seeking comprehensive video solutions.
VHX
“Why just videos and live streaming, let’s enable users to earn?”
Vimeo acquired VHX to gain over-the-top (OTT) capabilities.This allowed users to create custom mobile apps for on-demand video content, enabling them to sell content directly on the platform and boost revenue opportunities for both creators and customers.
Magisto (2019)
“Why only creators, let every one create professional videos?”
Vimeo acquired Magisto and targeted smaller businesses and individuals with AI-powered video creation tools to create professional-quality videos. This enabled more users to create videos, leading to an immediate increase in the content library on Vimeo.
Wibbitz (2021)
“Now is the time to go big…”
Vimeo acquired Wibbitz to bring enterprise-grade video creation tools to Vimeo and target larger businesses as a next goal. This attracted more large organizations to Vimeo, leading to increased revenue and thus helped Vimeo emerge as a winner in comprehensive video solutions for enterprises.
WIREWAX (2021):
“Final Attack.. Let’s enable companies to earn through Vimeo”
Vimeo acquired Wirewax to offer video monetization capabilities for enterprise customers. This allowed businesses to drive e-commerce directly from their videos.
These partnerships collectively enhanced Vimeo’s marketing capabilities, improved user engagement, expanded service offerings, and built a loyal customer base across individuals, creators, professionals and companies.
Growth Strategies
Advertising Campaigns
Vimeo has invested significantly in advertising to raise brand awareness and attract users. Two standout campaigns include:
This campaign highlighted Vimeo's ad-free experience by contrasting it with disruptive ads on other platforms.
This campaign aimed to empower video creators across various sectors, featuring humorous ads that showcased Vimeo's ad-free offering.
Strategic Partnerships and Integrations
Vimeo has focused on strategic partnerships to expand its reach and make its services more accessible:
Collaborations with Platforms
Partnerships with Mailchimp, HubSpot, and TikTok allow users to easily incorporate Vimeo videos into their marketing campaigns.
Integrations with Video Editing Software
By integrating with Final Cut Pro and Adobe Premiere Pro, Vimeo enables users to work seamlessly within the platform without switching tools.
Product Innovations
Vimeo has consistently introduced new products and features to cater to different user segments and simplify video creation, even they acquired companies to provide a unifying experience:
Vimeo Create (2020)
A tool designed to simplify video creation for small businesses and marketers.
Vimeo Marketing
An integrated suite of tools for businesses to streamline video production and marketing efforts.
Community Engagement
Vimeo has cultivated a strong community of creators by focusing on their needs and providing supportive tools:
Connecting with Audiences
Creators can connect with audiences, receive feedback, and track engagement through Vimeo's analytics tools.
Clean Design and Ad-Free Experience
Vimeo's user-friendly, clutter-free design appeals to creative professionals and businesses.
Staff Picks
Vimeo’s Staff Picks program has played a pivotal role in boosting user engagement and promoting quality content on the platform:
Increased Visibility
Being featured as a Staff Pick can catapult a filmmaker’s career by placing their work in front of a broader audience, including industry professionals and potential collaborators.
Example: Videos chosen as Staff Picks often garner an average of 100,000 views, significantly enhancing exposure for creators.
Career Advancement
The Staff Pick badge acts as a valuable credential, helping creators stand out in a competitive industry.
Example: Many filmmakers credit their career breakthroughs to being featured as a Staff Pick, which serves as a prestigious endorsement.
Notable Users
Over the years, Vimeo has attracted a diverse range of notable users, enhancing its reputation and drawing more users to the platform:
Comedians
Kristen Schaal, "Weird Al" Yankovic, and Reggie Watts have used Vimeo to promote their content.
Musicians
Kanye West, Nine Inch Nails, and Britney Spears have broadcast their content on Vimeo.
Public Figures
Former U.S. President Barack Obama has used Vimeo to broadcast HD transmissions.
SEO and Video Optimization
Vimeo encourages users to optimize their videos for search engines to enhance discoverability:
Video Optimization
They explicitly advised marketers to refine meta titles, tags, and descriptions to improve search rankings, driving organic traffic to the platform.
Channel Customization
Users can create branded channels that reflect their identity, helping to attract and retain viewers within the Vimeo ecosystem.
By leveraging targeted advertising, strategic partnerships, product innovations, community engagement, and the endorsement of notable users, Vimeo has successfully acquired a loyal user base and positioned itself as a leading platform for video creators and businesses.
Impact - Revenue per User
Vimeo's revenue per user stood at approximately $243 in 2021, up from $205 in 2020.
This increase is because of Vimeo's persistent focus on subscription-based revenue, primarily from its comprehensive offerings to individual creators and businesses.
Vimeo's revenue per user has seen steady growth over the past five years:
2019: Vimeo had nearly 1 million subscribers and $160 million in revenue, making $160 revenue per user.
2020: Revenue increased to over $200 million with 1.2 million subscribers, raising revenue per user to approximately $167.
2021: With 1.6 million paying subscribers before going public, Vimeo's revenue per user was around $205.
2022: Revenue per user continued to rise, reaching an estimated $243.
2023: As of September 2023, Vimeo had revenue of $417.23 million over the previous 12 months with a user base of around 300 million, suggesting a revenue per user of about $139.
The significant growth in revenue per user from 2019 to 2022 reflects Vimeo's successful transition to a subscription-based model focused on professional creators and businesses.
However, the dip in 2023 might be due to the larger user base, which includes more free accounts.
By focusing on premium features and services, Vimeo has more than doubled its revenue per user over the past five years.
Overall, Vimeo's strategy of targeting high-value customers and emphasizing subscription plans has effectively increased its revenue per user, despite the challenges of maintaining growth in a competitive market.
Learnings
Here are my takeaways from Vimeo’s Growth Story that would be useful to you…
1. Focus on Niche Markets
Identify a specific niche and cater to their unique needs. By focusing on a comprehensive tool kit and delivering exceptional value, you can create a loyal customer base that appreciates your offering.
Example - Vimeo started as a niche platform for independent creators. This focus on a specific audience allowed Vimeo to build a loyal user base even in a market dominated by YouTube.
2. Leverage Strategic Partnerships
Form strategic partnerships that complement your strengths and address your weaknesses. Collaborations can provide access to new technologies, expand your reach, improve your service offerings and reduce churn.
Example - Vimeo’s partnerships with companies like Simon Data, Salesforce Marketing Cloud, and Snowflake enabled them to increase user engagement, reduce drop offs, and increase in conversions.
3. Invest in Product Innovations
Regularly innovate and update your product to meet the evolving needs of your customers. Introducing new features can attract new users and retain existing ones by keeping your offering relevant and valuable.
Example - Vimeo continuously introduced new features like Vimeo Create and Vimeo Marketing to cater to creators and businesses.
4. Engage with Your Community
Build and nurture a community around your product. Engage with your users, provide them with tools to succeed, and recognize their achievements. A strong community can drive word-of-mouth marketing and long-term loyalty.
Example - Vimeo’s community-centric approach, including features like Staff Picks and robust analytics tools, helped them foster a strong community of creators.
5. Utilize Data-Driven Decisions
Leverage data to understand user behavior and optimize your strategies. Real-time data can help you make informed decisions, personalize user experiences, and improve overall engagement and retention.
Example - Vimeo’s partnership with Simon Data enabled them to use real-time data for personalized and timely interventions, significantly boosting user engagement and conversions.
By implementing these strategies, you can learn from Vimeo’s successes and navigate the challenges of growth more effectively. Focus on your niche, form strategic partnerships, innovate consistently, engage with your community, and utilize data-driven decisions to build a thriving business.
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