Victims of Vimeo
How does Vimeo treat long-time, loyal customers? If they’re less profitable, they bait and switch mercilessly. Businesses discovering which types of customers are profitable and which are not is hardly new. Some businesses exist to accommodate specific markets while others focus on large, enterprise-scale consumers. Vimeo grappled with these questions, and their conclusions rankled much of the tech community.
Vimeo’s Harsh Answers
“We are a B2B solution, not the indie version of YouTube,” says Vimeo. In other words, small customers are undesirable, especially if their audiences view a few too many videos in 4K. As a result, some customers paying $200 annually to Vimeo are now asked to fork over thousands or have their content deleted. For-profit businesses are well within their rights to raise prices and choose their desired customers. But this felt like a rather shocking bait-and-switch.
Patreon users were probably the most broadly impacted, given that Vimeo was their default provider. The back-of-the-envelope math from the twitter thread linked above implies that if 800 viewers consume one 45-minute, 1080p video each month, the bandwidth required would hit Vimeo’s cap. This is hardly a new phenomenon, as Vimeo has previously caught some negative press for ostensibly ordering certain users to pay significantly increased fees or see their accounts deleted.
Vimeo allows customer-facing websites to embed videos without YouTube-style recommendations at the conclusion, customizable player controls, and no ads. Unfortunately for creators, in addition to the fees they charge, they offer limited transparency with respect to bandwidth caps and content policy removals. In other words, your costs unexpectedly skyrocket or one of your videos is removed without warning. Vimeo fits your small, growing business… until the unexpected sticker shock occurs.
A Kinder Response
With this in mind, a few months ago, our company, AE assembled a subscription video platform for health and fitness. A client had requested a custom product for this purpose. We decided to build it more cheaply ourselves, with the client as our first customer. Therefore, this project was built for us, by us. This playbook served us well with the creation of ElectricSMS, which we sold to ReCharge for $6M while retaining significant equity.
After consuming our own delectable dogfood, we found a launch partner who decamped from Vimeo to join our charge.
We aspired to develop a platform with the ability to scale with creators, unbundling them from their bait-and-switching corporate overlords. We increased their agency with a low-cost, high-quality solution and deployed machine learning tools to classify the posture of their users to boot.
Since then, customers from Vimeo and elsewhere have led us to $11K in monthly recurring revenue (MRR).
That figure continues to rise at an inspiring rate. MRR is doubling monthly, over 20K users benefit from the web and mobile apps, and millions of dollars have passed through the platform since its public launch. This would typically be the moment when venture capitalists salivate and hurl capital. Of course, accepting that capital often renders such platforms unable to resist short-term incentives that punish large swaths of customers. We are self-funded, and as a result, control our own destiny.
The Path Forward
Vimeo may not be willing to exert the effort to accommodate smaller, growing customers. But we are. Some of our testimonials specifically refer to migration away from Vimeo because its platform would not attend to their specific health and fitness needs.
If Vimeo believes its (short-term) incentives align with larger clients and cash grabs, then so be it. We’ll be here, ready, and waiting. The arc of technology history bends towards those who respect the long-term growth of their customers and themselves. We believe the long view is good for human agency and good for business.
And perhaps we should create another platform for another set of providers (data science educators, financial advisors, poets, parodists?). And so we did!
We’re willing to wager that there’s an impressive cadre of creators awaiting an opportunity to grow with a similarly-scrappy group of agency-increasing developers eager to take the long-view along with them!
- Covered in greater detail in this article from the Verge.
- Apparently, Vimeo also does a predictably poor job of disclosing this cap, allowing users to build stickier relationships the site, only to discover that they must pay 10x what they might have expected initially.
- Note: It seems as though Vimeo has, in response to the backlash, adjusted their policy. However, even if Vimeo is sorry, fundamentally, their position is unchanged. Users will receive longer notice periods, a bit more transparency regarding bandwidth caps, and a few exceptions will be carved out. Still, if you aren’t in Vimeo’s desired market segment, the costs will skyrocket, even if you receive a few extra weeks to adapt.