×
You will be redirected back to your article in seconds

Vimeo CEO Anjali Sud on Why They Gave Up Trying to Imitate Netflix’s SVOD Model

Less than a year ago, Barry Diller and his senior team at IAC still believed they could successfully launch a version of Netflix for indie programming. The idea: to springboard a subscription-video package off the company’s Vimeo service, which attracts some 240 million viewers each month and has been pumping out internet video since 2004.

But the company suddenly pulled the plug on the venture in June after coming to the realization that building anything close to a Netflix model wouldn’t come cheap.

In fact, Vimeo’s foray into subscription video would have been cost-prohibitive by thrusting it into competition with rivals that have much deeper pockets, explains newly appointed CEO Anjali Sud — who previously ran the company’s creator business unit — in an exclusive interview with Variety, her first since being named top exec by IAC chief Joey Levin in July.

“When we set out to do [subscription video-on-demand] several years ago, it was a little bit different — at the time, you could spend millions on a compelling service that was going to solve a problem for consumers,” Sud says. “And now, with not just Amazon, HBO, Hulu and Netflix but also Facebook and Apple and others [buying premium content], those stakes have gone from millions to billions.”

Now that Vimeo has abandoned its SVOD ambitions, the company is returning full bore to its roots, with its sole mission being that of empowering creators to produce, distribute and make money from their videos. The client roster also includes media companies: Vimeo recently inked a deal with Lionsgate to help power two of the studio’s over-the-top services, Kevin Hart’s Laugh Out Loud and Tribeca Shortlist.

The shift in strategy has let Vimeo redeploy the product and engineering personnel who had been working on the subscription service to other initiatives, Sud says.

Those initiatives include the launch of a premium live-streaming video service by the end of 2017, which by far has been the No. 1-requested feature from its user base. “We are not building a Facebook Live or YouTube Live,” Sud says. “This is a professional-level live-streaming service for anyone who’s hosting professional events.”

Vimeo is assembling a group called Creator Labs, an internal R&D incubator focused on emerging storytelling formats like augmented and virtual reality. In addition, the company is developing mobile-centric video publishing tools and planning to expand in international markets with localized services (more than 50% of Vimeo creators live outside the U.S.).

And it’s aiming to build a complete end-to-end video workflow system, starting from an initial idea through collaboration and editing to one-click publishing to social media.

“Really, in the last couple of years, we haven’t been able to fully focus on executing toward creators, so that’s what we’ll be doing,” says Sud, who before joining Vimeo in 2014 worked at Amazon and on Time Warner’s M&A team.

The financial impact of pulling the SVOD plug has been minimal, according to Sud, affecting only a few of Vimeo’s nearly 250 employees.

Among those who were let go was Alana Mayo, former vice president of production at Paramount Pictures, whom Vimeo had recruited to head original development. Vimeo hadn’t gotten much further than optioning some scripts; those projects are reverting back to the creators who pitched them. “We were planning in the next 12 to 18 months to start to incur significant costs around content,” Sud says. “That is no longer happening.”

The new CEO sees Vimeo’s sweet spot as supplying the tools and tech for creators in the middle of the market who need a more full-featured offering than YouTube’s and Facebook’s mass-market platforms, and a more affordable solution than the high-end hosting and streaming services of companies like Ooyala or Disney-owned BAMTech.

Vimeo pegs the addressable market for video-creator services at nearly $10 billion worldwide, although the company generates just a sliver of that, with an annual revenue run rate of around $80 million.

Besides the sheer cost of acquiring content, Vimeo’s launch of an SVOD service would have presented other business issues. For example, it would have driven the company to try to retain viewers on its service — in conflict with its creators’ desires to distribute their content anywhere. “Now,” Sud says, “I think we just have the clarity of focus.”

More Biz

  • Tekashi 6ix9ine Docuseries Coming From Showtime

    Tekashi 6ix9ine Docuseries Coming From Showtime and Rolling Stone

    Showtime Documentary Films today announced a new limited docuseries profiling controversial rapper Tekashi 6ix9ine. Titled “SuperVillain” and inspired by the Rolling Stone feature written by Stephen Witt, the three-part series will trace how a New York City deli clerk named Daniel Hernandez became superstar rapper Tekashi 6ix9ine — who racked up 2.6 billion streams and [...]

  • Fader Label Logo

    Fader Label Signs Two New Acts, Boosts Staff

    The Fader Label, home to Clairo, Matt and Kim and others, announced two new signings today along with three new hires on its staff. Charlie Burg and Zachary Knowles have joined the label’s talent roster, while Carson Oberg has come aboard as general manager, Yasmine Panah as project manager and Josh Hymowitz as label coordinator. They [...]

  • CBS HEADQUARTERS

    CBS-Viacom Merger Details Revealed, Shares to Trade on Nasdaq

    Negotiations between CBS and Viacom went down to the wire on the day the long-gestating transaction was finally sealed on Aug. 13. CBS Corp. and Viacom revealed the timeline of the merger talks in a Securities and Exchange Commission filing Thursday that runs more than 650 pages. Also Thursday, CBS and Viacom said the shares [...]

  • Nile Rodgers and Merck Mercuriadis

    Hipgnosis Songs Raises Another $295 Million

    Hot on the heels of its deal to acquire a catalog of 108 Timbaland copyrights, Hipgnosis Songs has raised another $295 million (£231 million) — putting its total to nearly $800 million to date. According to the announcement, a total of 231,000,000 C Shares have been placed by Nplus1 Singer Advisory LLP  and J.P. Morgan [...]

  • Los Angeles Times

    L.A. Times Reaches Agreement With Guild

    The L.A. Times has reached a tentative agreement with the union that represents the bulk of its non-management employees, the paper announced Wednesday. The agreement follows more than a year of negotiations. The 475 reporters, copy editors, photographers and other staff covered by the agreement must still vote for ratification. Assuming it is approved, it [...]

  • AMC TheatresShop signs, Los Angeles, America

    AMC Theatres Accused of Firing VP Who Complained of Gender Pay Gap

    A former vice president at AMC Theatres filed a federal lawsuit on Wednesday, accusing the company of firing her after she complained that she was paid far less than her male peers. Tonya Mangels, who was vice president of product marketing, said that in March 2018 her supervisor inadvertently sent her a spreadsheet that included [...]

  • Johnny Depp

    Johnny Depp Trial Over Location Manager's Assault Suit Delayed to May

    Update: On Wednesday afternoon, Judge Holly Fujie ordered the trial postponed. A new trial date was set for May 11, 2020. Johnny Depp is expected to appear in a Los Angeles courtroom next week for a trial on a lawsuit alleging that he punched a location manager during the 2017 shoot for “City of Lies.” [...]

More From Our Brands

Access exclusive content