What we do
Earlier this week Vimeo launched their brand-new
Video Vimeo on Demand offering. It has the potential to be a revolutionary service, but first it has to overcome some major hurdles.
Currently, iTunes is far and away the #1 Internet-based VOD system. According to market research group NPD, in 2012 Apple walked away with a 45% share of all VOD sales. The next closest competitor was Amazon at a (relatively) meager 18%. iTunes dominance is even more surprising when you consider the limited devices it can run on: No XBox, no Playstation, no Android.
The funny thing is, even Apple’s dominance is paltry compared to TV operator’s dominance in the VOD marketplace. If you add up all Internet-based VOD, including Apple, Amazon, Vudu, Xbox, etc., together they only count for 28% of the total VOD market. Yes, your friendly cable company commands a whopping 72% of your on-demand dollars.
Netflix is certainly affecting all of this, but as a subscription service it’s a different beast.
Now, back to VOD. As a producer there are several ways to enter this market today. You can get an agent and hope they can successfully, eventually, sell your series into the Comcast or Time/Warner VOD systems. This can take about a year if it happens at all. Or, you can take destiny in your own hands by walking up to one of the handful of Apple-certified encoding houses and pay them about $1500 per title to convert your ProPres files and list them on iTunes. Sit back. Profit.
Okay, so you don’t have $1500 sitting around to list your project on a system like iTunes. $1500 could buy another Zeiss lens, after all. Let’s look at the self-service option for the second-place system, Amazon. For their VOD Amazon relies on a subsidiary named CreateSpace, a company that apparently designed their system in 1990.
Step 1 in getting on Amazon: Burn a DVD. (Seriously.) Send that standard-definition DVD to CreateSpace, who – after several weeks – will rip a standard-definition file and insert it into the VOD system. It is a fairly cheap process, but if you have 15 episodes (like we do) the idea of creating 15 discs just so they can be converted back into digital files is appalling in 2013.
There has to be a better solution.
This is where we have to acknowledge comedian Louis C.K. who self-produced a comedy concert video and sold it directly to his fans. Overnight, it was a smash hit, selling millions. As producers we all knew this was possible, but it needed a big success to prove it to the masses. Louis C.K. provided that. Self-publishing finally found a better model.
In the months following the Louis C.K. success the VOD landscape started to change. Chill.com, a social video aggregator, pivoted their entire business to replicate the Louis C.K. model (and, in fact, a majority of their sales are comedy concert films. You can see one of our documentaries listed here.) Chill also mixes in a little Kickstarter in the way they offer bonus premiums on top of the downloads, which is interesting.
By the end of 2012, you couldn’t toss a stone without hitting someone else looking to bring self publishing PPV to independent producers everywhere (and take their own slice of the pie in the process.) A noble idea with a potentially solid business model: a stark contrast to the previous wave of internet video startups. Has YouTube really been that great for producers? That’s debatable.
Enter Vimeo. This site has been a head-scratcher for many years. It has a great video player, but shuns commercialization of its content. Not only has the site refused to run pre-roll ads, it explicitly forbids creators from posting commercial content onto its servers. Because of this, the site has become a haven for producers that, apparently, don’t need to make any money off their work. That means it has a lot of skating and skiing videos.
A few years ago Vimeo decided it wanted to start making money. Sticking to their guns regarding video ads, it offered a Plus member package for $60/year. This gave users increased storage, removed banner ads, and some extra user perks. As a follow-up Vimeo added a Pro tier, which is primarly a white-label video service. We actually use it to power a number of our own sites (including subiesport.tv and drivingsports.com.)
Meanwhile, Vimeo was also rolling out players for every major viewing platform, including Apple TV (Vimeo’s slow-motion theater on the big-screen is awesome, btw), iOS, XBox, Samsung, Vizio, Roku, etc. Their mantra was convenience, quality and no-commercials.
People like skating videos and they like watching without ads on their mobile and home theater devices. Because of this, Vimeo has grown to become one of the top video destinations, just behind YouTube and DailyMotion, with 15 million members. If YouTube is the DVD clearance rack, Vimeo could be considered the Criterion Collection.
So it was particularly interesting when, last year, Vimeo started beta-testing its own PPV/VOD offering with a handful of full-length films. Films that I had no interest in, but I definitely was interested in the technology. To be successful, however, Vimeo would need to go all-in on VOD. Not just stick it in a corner (like YouTube does.)
It was at the 2013 SXSW music and tech festival when the announcement finally came. Vimeo was going to get serious about VOD. The first wave would open their VOD platform to anyone with a Pro account (that $200/year white-box soution we already use), with many more features promised as the platform develops.
Because we already host our broadcast screeners on Vimeo Pro implementing the new VOD pages was quick and easy. It was just a matter of adding some metadata, uploading a poster image, tweaking pricing and colors, then clicking the Launch button. Seriously. It couldn’t be easier. Vimeo takes a 10% cut on top of credit card and PayPal processing fees, leaving nearly 90% to the creator.
From the buyer’s side it’s just as easy. They have to create a free Vimeo account (if they don’t already have one), enter their payment info and then their purchases are added to the Watch Tab on every device they have a Vimeo app installed on. Or, if the producer has enabled downloads they can even download a DRM-free copy to their desktop.
So it’s all cupcakes and sunshine, right? Not exactly. As it is today, Vimeo on Demand isn’t going to change anything because it’s missing one critical component: A way to discover great VOD content. The VOD offerings don’t even show up in Vimeo’s search engine yet (update: a Vimeo rep confirmed their engineers are “working on it.”) They are, effectively, hidden from the world and reliant on each producer’s own personal network to bring in the buyers. This is fine, to a degree, but if there’s no way to tap those 15-million Vimeo members, what’s the point of launching on Vimeo versus, say, Chill or Distrify? (Other than slight variations in features.) There isn’t.
Pay your $1500 to get on iTunes and you have instant access to millions of members. Vimeo, pay $200 and get some great white-label features plus POV, but as for accessing their members? Not yet. That will change, however, as Vimeo is preparing a VOD directory which will launch at some point in the unspecified future. If they can offer a nice lineup of shows, make it easy to discover new titles, make show offerings browsable across all devices and (this is a biggie) if they proactively market the heck out of them, 2013 could be the year that everything changes for the do-it-yourself independent producer.