In a brave and honest letter written by Vimeo’s CEO, the company has declared a layoff of 6% of its workforce. It seems that Vimeo struggles to find its business destiny. Is this the beginning of the end?

Vimeo has laid off 6% of its workforce

In a brave and honest letter aimed at all Vimeo employees, the company CEO informed the significant reduction in the workforce.  As of the end of 2021, Vimeo had a total of over 1,200 full-time employees. The letter indicates that Vimeo has laid off 6% of its workforce, amounting to around 70 employees in total. “Today I have hard news to share: after careful consideration, we have made the decision to reduce our workforce by 6%. We are making this decision in order to ensure we come out of this economic downturn a stronger company” stated Vimeo’s CEO. At first, the layoff of 6% doesn’t seem like an indication of a solid company crisis. However, in the case of Vimeo, it can mark the beginning of the end.

Vimeo – Not for filmmakers anymore

As a digital cinema magazine, we should not cover Vimeo anymore as it ceased being a platform for video creators. Vimeo has declared that it’s not the indie version of YouTube. As stated in the 2022 Annual Shareholder Letter: “The majority of our potential customers don’t yet know the answer to this question, largely because Vimeo has evolved so materially over the last few years. Today we are a technology platform, not a viewing destination. We are a B2B solution, not the indie version of YouTube”. Vimeo has pushed away filmmakers by forcing them to pay thousands of dollars for video content. In fact, this strategy was well mentioned in the Shareholder Letter by the CEO stating; “I want to share 3 signals that we think indicate we’re on the right track: Over the past eight quarters, users who try our tools for free are converting to paying subscribers at increasing rates”. Loyal users of the platform were forced to pay for premium services before their precious content will be deleted. This action caused many frustrated users to leave the platform. Here’re two articles that shed light on that matter:

• Vimeo is Deleting Your Videos When you Switch to Basic Account
• Vimeo: “We are a B2B solution, not the indie version of YouTube.”

Transforming to a SaaS company

In 2011, Vimeo spun out of IAC as its 11th independent publicly-traded company and the first SaaS business born from its formidable portfolio. Vimeo went public during a pandemic, experienced our share of growing pains, and ultimately did not achieve the ambitions it set for the year. The company hoped that videos that are served in a SaaS (Software as a Service) package, will be a winning solution, as it was for Zoom during the pandemic. However, Zoom’s share is being smashed, as so as Vimeo.

What is Vimeo, really?

In the 2022 Annual Shareholder Letter, Vimeo tried to explain its goals. As stated in the letter: “What is Vimeo, really? The majority of our potential customers don’t yet know the answer to this question, largely because Vimeo has evolved so materially over the last few years. Today we are a technology platform, not a viewing destination. We are a B2B solution, not the indie version of YouTube. We are both an established free video platform and an emerging enterprise software leader. But our customers don’t care about how we define ourselves; they care about what Vimeo does for them”. According to Vimeo, its solution enables companies and their teams to effortlessly collaborate, communicate, and connect with video. “We offer a unique combination of 3 things that companies care about: enterprise-grade video capabilities, delivered via a consumer-friendly UX, integrated into a single platform” Vimeo explains.

Here’re some examples mentioned in the letter:

• Williams Sonoma uses Vimeo to centralize their video content securely for over 28,000 employees worldwide across all 7 brands.
• Nike uses Vimeo to train retail partners across Europe, from Footlocker to JD Sports.
• Expedia uses Vimeo to broadcast high-profile, no-fail internal events to thousands of
  employees.
• Gap uses Vimeo to publish and manage their marketing videos, from digital lookbooks
  to social media campaigns.
• Bayer uses Vimeo to host live panel discussions, and distribute marketing content in multiple languages, and train their buyers in over 20 countries.

Main product: Vimeo Enterprise

Vimeo’s flagship is called “Vimeo Enterprise”, which is Vimeo’s video offering for large organizations, sold through Vimeo’s sales force, that provides 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 our technology on a white-label basis (so that a company’s own branding is featured instead of Vimeo). As you can see, there’s no correlation between filmmaking and high-quality ultra HD videos. Nevertheless, Vimeo Enterprise suffers from the same side effects that occurred on the platform, which is impaired buffering and playback. I’ve watched hundreds of hours of Vimeo Enterprise videos and I can confirm (from my personal point of view) that the viewing experience is not so good. Personally, I can not watch Vimeo’s videos properly unless I download them for offline usage. 

A confused company

Vimeo understood that its product is inferior to YouTube. Once, the quality of Vimeo was better than YouTube, and Vimeo could handle better high-quality videos (delivered in high-quality codecs). The platform could preserve the fine details of the video more accurately than YouTube. However, YouTube was dramatically improved and took Vimeo in almost every parameter related to video quality, viewing experience, as well as UI. Moreover, creators needed to pay Vimeo, whereas the mighty YT was (and still is) free. As for today, there’s no real reason to upload your videos to Vimeo. As explained, the company defines itself as a pure B2B platform. But, in regard to the B2B market, they are so many better alternatives to Vimeo. Hence, Vimeo suffers from being an unfocused and confused company that is going to fade away in a couple of years. Let’s hope to be wrong on this one.