How Vimeo became hipster YouTube

February 23, 2011: 12:20 PM ET

Vimeo is the web's go-to for high-quality, DIY digital video. And its founders might've invented the Like button. Not bad for a side project.

Vimeo

Image via Wikipedia

By John Patrick Pullen, contributor

November 17, 2005 is a day that lives in online infamy. While no one knew it at the time (5:28 p.m., to be precise) this is when the first 'Like' button was clicked. Of all the websites that currently feature the social media stamp of approval — like Internet heavyweights Facebook and Pandora — the ubiquitous 'thumbs-up' originated on the unlikeliest of places: the online video-sharing service Vimeo.

Well, maybe.

First off, claiming to invent the 'like' button is like saying you were the first person to ever eat cold pizza for breakfast — it's probably not true, and whoever actually had the first slice likely didn't take note of the landmark event. Secondly, Vimeo's vice president of product and development, Andrew Pile, readily admits they copied the idea from social news aggregator Digg. ("We liked the Digg concept, but we didn't want to call it 'Diggs,' so we came up with 'Likes,'" says Pile.) But that's not the point. Vimeo has built a scorching hot social media site by being the first to implement forward-thinking web technologies without much, if any, fanfare — and the 'Like' button is just one example.

Founded in late 2004 by Connected Ventures, the company best known for comedy website College Humor and funny t-shirt e-tailer Busted Tees, Vimeo was originally a side project for web developers Jakob Lodwick and Zach Klein. After hours, the two College Humor staffers built the site and began experimenting with uploading and tagging short videos for their friends. And with that — from the real-world, physical social network of these two people — Vimeo's video sharing service was born.

But with College Humor's popularity, Vimeo was put on the back burner, slowly building a user base through word-of-mouth alone. It saw no substantial investment until after August 2006, when IAC/InterActiveCorp (IACI) bought 51% of Connected Ventures. "After the sale, IAC looked at everything they bought and realized they had also accidentally purchased a video sharing company," says Pile. And in November 2006, when Google (GOOG) purchased YouTube for $1.65 billion dollars, the incidental acquisition seemed particularly fortuitous. "It was kind of on everyone's mind that video sharing was going to be a hot thing," says Pile. "Google thought so; I'm sure everyone else did."

At the start of 2007, IAC dispatched Klein, Lodwick and Pile to work on Vimeo full-time. They created a site focussed on the uploader, rather than the viewer, and quality content, rather than high quantities of videos. Terms of Service that required the uploaders to be the content creators and banned negative videos, commercial content, and even video game walkthroughs, helped attracted independent filmmakers and auteurs of every genre. They eschewed the "top 10" mentality of other online media sites and promoted videos on their front page due to merit, not popularity. And perhaps the most important thing they did was listen to their users, introducing bold new features before they eventually became standards elsewhere. "Most of our product has come from our user base," says Pile. "There's millions of people out there using this service, and, quite frankly, they hit roadblocks and have things they want to be able to do."

As a result, in October 2007 Vimeo became the Internet's first video sharing site to deploy Flash-based, consumer-focussed HD playback — meaning users didn't have to install any plug-ins to view the high definition content. They also progressed from allowing 5 megabytes of uploading per week when the site launched, to 20 megabytes, then 250 megs, then 500. Currently, Vimeo allows paying users to upload five gigabytes per week, and their videos can be a single, uninterrupted five gigabyte file — which is enough for approximately 2 1/2 hours of HD video. "The technology has exploded, the interest has exploded, the usage has exploded," says Pile, "and traffic is the end result of that."

Vimeo's user base has followed suit, growing steadily — especially in the last year. For example, in December 2009, Vimeo had around 14.5 million unique, monthly visitors. Now the site attracts approximately 45 million monthly uniques. They also had 1.5 million registered users at that time — a number that primarily represents video uploaders. Today that number sits around 5.3 million users. Alexa Internet's traffic rankings for the site was around 600 in early 2010, but it has climbed to 148 today.

But it's Vimeo's embedded player that sees the most action. With an ever-increasing user base, Vimeo is increasingly becoming the video host of choice for bloggers and videographers. And while the company doesn't currently calculate how many people view their videos on outside sites, with Facebook, Twitter, and Tumblr users increasingly sharing Vimeo clips, the site's reach far surpasses its own site traffic.

Meanwhile, Vimeo's staff has swelled to include more than 30 people, and the company plans to expand further this quarter. Their revenue model is mostly based on subscription services, with a bit of advertising supporting the costs of the free accounts (paid subscribers don't see ads). Their free, basic account allows users to upload up to 500 megabytes of content per week, or $59.95 per year (or $9.95 per month) gets them the five gig allowance.

A key differentiator between Vimeo and it's main competitor, YouTube, is their ad scheme. "We have no in-player ads at all, anywhere," says Dae Mellencamp, Vimeo's general manager. Basic accounts are supported through limited advertising that is typically a single ad that sits on the page. "We believe in sort of a kind of different ad experience where it doesn't have to be in so many places all the time," she adds. "It can be incredibly effective by being simple."

Another difference between the sites is that almost all of YouTube's services are offered for free and supported by ads, a stark contrast to Vimeo's operations and a big reason why they try to keep ahead of the curve. Vimeo can't compete on price, so they make YouTube play catch-up on features.

Amazingly, despite Vimeo's recent growth — much of which can be attributed to HD camera-packing smartphones — the service has yet to launch a mobile app, though one is currently in development. But their lack of an app shows how passionate their users actually are — these auteurs are taking video, bringing it home, and editing it, rather than sloppily shooting and uploading on the fly. "The iPhone has been a big boon," says Mellencamp. "As that grows more and more, the fact that there's just more prevalence of video everywhere and the ability to take it, is absolutely driving people's desire to upload and share what they're creating."

Vimeo does, however, have a leanback site optimized for GoogleTV, a move could position them as a high-quality player in the smart TV space in the future — if they continue to develop it. Their biggest challenge, however, will come in promoting their features. Vimeo does not buy advertising, and though they have launched their own film festivals and video awards, they primarily still rely on word-of-mouth to raise brand awareness. Still, considering their steadily increasing traffic and user figures, their foundation of technological know-how, their willingness to push the technological envelope, and the stunning HD content they host, with Vimeo, there's a lot to like.

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