Over-the-Top: Where Access Trumps Ownership

Vimeo CEO on company’s new SVOD strategy, how it will grapple with rivals like Amazon

Vimeo cut its teeth as an over-the-top video platform that enables content partners to sell and rent their handiwork, but it is now expanding more deeply into subscription-based models. The OTT market isn’t getting easier for Vimeo, though, with mounting competition and Amazon’s recent launch of a self-service platform. Next TV editor Jeff Baumgartner spoke with Vimeo CEO Kerry Trainor about plans for SVOD and 360-degree video, and how the IAC-owned company will expand on a business that supports more than 700,000 subscribing creators and a base of 280 million users worldwide. Here are edited highlights.

NTV: Vimeo just acquired an OTT platform provider called VHX. In addition to helping you support SVOD, what other gaps does this deal fill, and how does it change or expand your core business?

Kerry Trainor: The primary component is about us being able to add a really great white-label SVOD platform and combine those capabilities with the streaming marketplace we’re developing as part of Vimeo’s owned-and-operated, branded destination.

Today, we have this complete ecosystem for any content creator or owner who is looking to stand up their own SVOD channel or sell TVOD [TV-on-demand] content and do it on their own branded site, their own branded apps on both mobile and television, as well as through the Vimeo marketplace. We think, together, it represents one of the best, truly open, truly global platforms out there for creators.

NTV: How do you see SVOD fitting into the mix, versus your focus on individual sales and rentals?

KT: I absolutely see SVOD becoming the primary paid model from the consumer perspective over time. Like we’ve seen in the evolution of the audio market, where it’s pretty much a full access-vs.-ownership world, video is going to evolve much the same way, where consumers will be more interested in access to content versus owning that content.

Even on the T-Box side [with Telstra], we’re seeing rentals come more to the fore than purchases.

NTV: Do you have any interest in adding free, ad-supported options to the mix?

KT: We’re 10-plus years into the ad-supported online video space, where YouTube is clearly the frontrunner in that, Facebook is going to be a major force in that and others are dipping their cup into the migrating stream of dollars coming from offline to online.

And you’ve got the major OTT services like Netflix, Hulu or Amazon. We believe that there’s going to be a flourishing world of niche channels that will be reaching their audiences with premium, paid, ad-free services though open platforms, and that is the home and the platform that Vimeo is building. We want Vimeo to be the HBO phase of online video.

NTV: What kind of interest do you have in providing a virtual reality or 360 video capability to your platform?

KT: We are tracking VR and 360 [video] very closely. It is something we’ve worked on here in our skunkworks, where we’ve been testing prototype versions. For us, it’s always about a balancing act of when there’s early interest in something versus when we think it’s really ready for primetime.

NTV: Amazon just introduced Amazon Video Direct, a self-service platform for content creators. How do you view this — as competitive or complementary to what you’re doing at Vimeo?

KT: Amazon is an incredible platform and a formidable force. Seeing them opening up only demonstrates our point and our belief that creators are going to want to go direct to their audiences and they’re going to want to offer premium paid experiences.

The key differences are that Amazon is still only available in five markets where Vimeo is a truly global platform. We have sales in over 200 markets and territories. Our revenue share is still much more creator-friendly. Amazon is taking 50% of revenues on the TVOD and SVOD side. We’re taking just 10% on the TVOD side and we’re charging just $1 per subscriber per month on the SVOD side. We think that our platform really stands apart.

NTV: We’ve seen a wave of virtual MVPDs enter the fold, like Sling TV and PlayStation Vue, and what Hulu is working on. Is there an opportunity there for Vimeo to look at enabling partners to offer live multichannel services?

KT: All the permutations are in play. Unbundling is happening before our eyes and we’re starting to see some elements of rebundling, in a sense. Ultimately, we think it’s all about reaching as many consumers as you can and building the best business that you can. Vimeo has been set up to be open and flexible, whether you’re an individual or you’re a major media company … to distribute direct to your audience on a global basis with any combination of services that you wish.