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In the past decade, video has gone from a form of entertainment to the most engaging and effective medium to communicate ideas, build brands, promote products and connect. This is because the video is a far richer and more expressive medium than text or static images. 

As consumers spend more time online and workforces become more distributed, businesses need to keep pace with their customers and employees, who increasingly expect to consume engaging video content.

Yet, for many businesses, professional-quality video remains out of reach due to a lack of time, budget, and expertise.

Vimeo has come up with a solution. Vimeo is on a mission to enable professional-quality video for all. Vimeo aims to empoVimeor every professional, team, and organization to use video, with tools that are far easier and more effective than ever before.

In this story, let’s try to understand how does Vimeo work and make money. What is Vimeo’s business model?

What is Vimeo? How does Vimeo work?

Vimeo, Inc. is an American video hosting, sharing, and services platform provider headquartered in New York City. Vimeo focuses on the delivery of high-definition video across a range of devices.

Vimeo works as a SaaS solution that spans the full breadth of a business’s video needs. Vimeo’s cloud-based software enables users to create, collaborate and communicate with video, eliminating the need to pay for multiple software providers and removing the barriers of time, budget, and technical expertise for many use cases.

Vimeo serves a growing community of over 260 million registered users in over 190 countries. Users include creative professionals, small businesses, marketers, agencies, schools, nonprofits, and large organizations. 

As of December 31, 2021, Vimeo’s video player was embedded on millions of Vimeobsites and is poVimeoring billions of views a month, with more than 300,000 new videos being uploaded on its platform daily. 

Vimeo claims to have set new standards in adopting higher resolutions, advanced imaging and audio protocols, new video compression formats, and intelligent streaming algorithms.

How does Vimeo make money? What is Vimeo’s business model?

Value Proposition

  • Centralized video solution: Vimeo’s business model focuses on providing an integrated video software solution that enables video creation, hosting, distribution, and measurement in one interface. Vimeo eliminates purchasing and managing multiple software providers for editing, storage, publishing, and analytics. 
  • Customization tools: Vimeo provides the advanced capabilities of a live TV studio (on-screen graphics, video switching, audio mixing, audience Q&A and polls) and sophisticated marketing tools (branding customization, in-video calls-to-action, email capture, and cross-platform distribution) at an accessible price point. 
  • Interoperable, integrated, and Developer Friendly: Vimeo integrates with cloud-based software applications such as Shopify, GoDaddy, Dropbox, Google, Slack, Adobe, Mailchimp, HubSpot, Asana, and Figma. Vimeo’s flexible video APIs (application programming interfaces) allow external developers and engineering teams to build applications using Vimeo’s technology.

Target Customers

Vimeo’s target customers include small-to-midsize businesses (SMBs), larger enterprises, marketers, agencies, and creative professionals.

Vimeo believes that anyone who produces video content, markets to customers, works with distributed teams, or hosts in-person experiences is a potential Vimeo user. 

Vimeo further believes that once Vimeo’s users begin to experience the benefits of Vimeo’s platform, they tend to expand significantly their use of video internally and externally. 

Competition

Due to the breadth of Vimeo’s all-in-one video solution, Vimeo faces competition from a range of companies that provide cloud-based video software tools. Vimeo Competes with:

  • Large social media platforms, such as Facebook and YouTube, offer a large built-in audience, social media-specific features, and the ability to monetize video plays through advertising. 
  • Traditional online video distributors provide video hosting, content management, distribution, analytics, and in-stream advertisements to larger customers. 
  • Two-way video communications software such as Zoom and Microsoft Teams allow multiple users to communicate with each other in real-time via video and are increasingly adding features that overlap with Vimeo’s platform, including support for Vimeobinars and centralized video management. 
  • Services that were not traditionally video-centric, such as Slack, Dropbox, and Canva. These services have increasingly added support for video features, including screen recording, video hosting, playback, and video creation. 

Marketing Strategy

Vimeo acquires subscribers primarily through: 

  1. conversion of free users to subscribers through organic efforts, including word-of-mouth referrals and in-product, messaging; 
  2. acquisition of subscribers through marketing spend, primarily through digital media channels; 
  3. Vimeo’s sales force (for enterprise customers); and
  4. acquisition of subscribers through third-party partnerships and integrations

How does Groupon work and make money: Business Model

Revenue Model and Services: How does Vimeo make money?  

Vimeo makes money primarily through a SaaS business model, selling subscriptions to cloud-based software. Vimeo employs a “freemium” pricing strategy, offering free membership and access to its video tools alongside paid subscription plans for advanced video capabilities. 

In 2021 Vimeo made $392Mn in revenue through 1.7Mn subscribers. Vimeo makes money through three plans:

1. Basic (free) memberships 

A basic membership allows users to create, record, upload, and share videos through its website and native apps for free. Vimeo’s free users are subject to weekly and total caps on uploaded videos. They do not have access to advanced video capabilities such as live streaming or the ability to add team members. 

Vimeo provides opportunities to upgrade to a paid subscription at natural points in the user’s experience, such as when a free user nears or hits an uploaded video cap. 

Subscribe

Vimeo also highlights the advanced video capabilities of Vimeo’s subscription plans natively within Vimeo’s free user product experience. In summary, a basic plan is used as a marketing tool for upselling paid services.

2. Self-serve subscription plans 

Vimeo charges fees that typically range from $7 per month to $900 per year for features that vary depending on the plan type. These features include video creation, collaboration, distribution, hosting, marketing, monetization, and analytics. 

Vimeo also offers the ability to add multiple team members to Vimeo’s higher-priced plans. As of December 31, 2021, nearly 15% of Vimeo’s subscribers had added team members. 

3. Sales-assisted subscription plans 

Sales-assisted plans provide additional features beyond Vimeo’s self-serve plans, plus options for dedicated support, account management, service level agreements, and professional live event services. 

Nearly 80% of Vimeo’s new sales-assisted contracts came from customers who were existing free users or self-serve subscribers first. As of December 31, 2021, sales-assisted customers represented 30% of Vimeo’s revenue. Vimeo’s sales-assisted plans include:

  • Vimeo Enterprise: Vimeo’s video offering for large organizations includes intuitive tools to record and upload content, secure live streaming of events, a corporate video library, webinar functionality, single-sign-on support, content delivery network optimization to improve quality-of-service in corporate networks, robust analytics, and the ability to use Vimeo’s technology on a white-label basis.
  • Vimeo OTT: an over-the-top (OTT) video monetization solution that allows customers to launch and run their video streaming channel directly to their audience through a branded Vimeob portal, mobile apps, and Internet-enabled TV apps. 
  • Vimeo Custom: plans optimized for high-volume users, e.g., plans that offer significantly higher storage or bandwidth.

Conclusion

At least 720,000 hours of video are uploaded daily–meaning it’s never been harder to break through the digital noise. You’re probably already using video to expand your business and engage new audiences, but even the highest-quality content is only successful if people see it.

Vimeo believes its total addressable market will be approximately $40 billion in 2021, growing to $70 billion in 2024. With such a vast opportunity, Vimeo’s business model is poised to grow.


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A passionate writer and a business enthusiast having 6 years of industry experience in a variety of industries and functions. I just love telling stories and share my learning. Connect with me on LinkedIn. Let's chat...

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