Home Vimeo’s Newest Feature: More Predictable Revenue Stream

Vimeo’s Newest Feature: More Predictable Revenue Stream

As more and more Web users gain access to broadband connections, the ability to consume high-definition video becomes an option for more people. But where are they going to access that content?

If a loyal user base – and USA Today – are to be believed, few user-generated video sites compare with Vimeo, a small but well-loved online video site with some of the best HD capabilities around. And after today, Vimeo is highly likely to be serving up more of that HD content, thanks to the release of Vimeo Plus.

With the purchase of a Vimeo Plus subscription at $59.95 per year, users gain access to a slew of features and benefits, like an increased upload limit – up 300% from 500 MB per week to 2 GB per week. no more banner ads, the ability to customize the video player, and access to more of the social features the service offers.

But one feature stands out for anyone who has ever sat drumming his or her fingers while waiting for a video service to finish the encoding process: Buying Vimeo Plus entitles users to priority uploading. That alone may be worth $5 a month.

For all the new found freedom a paying user gets, the service still has some limits. NewTeeVee highlights some of the intricacies of the small print for Vimeo Plus, including the fact that – even with a Plus account – “HD embeds are limited to 1,000 plays.” Going over that limit results in a reduction in definition until the user purchases more HD plays.

It’s not just the paying customers that have limits. The free users have had some new limits added as well. Vimeo point out that “you’ll only be able to upload one HD video per week. You will also be limited to creating 1 Group, 1 Channel and 3 Albums.”

All in all, the trade-offs seem fair and aren’t like to adversely impact users’ opinions of Vimeo in the long run.

The Real Question: Can Vimeo Convert Loyal Users into Paying Customers?

Vimeo’s user base is active and loyal – but relatively small. In these uneasy times for the online ad world, Vimeo’s decision to trade unpredictable ad revenue for subscription revenue is shrewd. Why? Aside from the likelihood of higher revenues, the subscription base will give Vimeo a better chance of predicting its cash flow month-to-month. The higher-ups – especially when they’re higher-ups like Barry Diller – tend to appreciate that kind of predictability.

But for all the predictability, will anyone bite? It’s not unheard of for a loyal user base on a free service to translate into paying customers for a fee service – especially if the cost is reasonable. Flickr Pro immediately jumps to mind. With the nominal cost of Vimeo Plus, Vimeo has the potential to see that kind of conversion, as well.

Will the latest features and benefits cause those loyal users to step up? We’ll have to watch – in HD – and see.

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