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Vimeo Goes Its Own Way

While big video content sites vie for premium material, an early contender is sticking to its indie roots—for good or for bad

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As the online video space grows ever more cutthroat, companies like YouTube, Netflix, and Hulu are all looking for a competitive edge in roughly the same way: through big-budget investments in professional content.

But one company, Vimeo, has decided to take a different path, betting it can grow its audience by sticking to its original playbook.

Vimeo could have been as big as YouTube. It was founded in 2004, a few months before YouTube, with financial backing from Barry Diller and startup expertise from co-founders who'd been key players in CollegeHumor.com. The site had real potential.

And it has had some success, cementing itself as the go-to hub for talented independent video producers. It's become a favorite among indie bands and makers of short films from Brooklyn to Portland. Along the way, it's amassed an impressively sized audience of 55 million worldwide unique users.

(IAC, which owns Vimeo, doesn't break out data on the profits of its individual properties, and neither IAC nor Vimeo would discuss the company's revenue.)

But YouTube it is not. Compared to the reach of its chief competitor, Vimeo has receded into relative obscurity—still chugging along, but quietly.

"Vimeo has always focused on people who [make] video," CEO Dae Mellencamp told Adweek. "We're not redistributing mass media content. We're not trying to be a network or TV. We think we provide people who want to share [user-generated videos] one of the absolute best experiences in which to do that."

In the last several months, as its competitors have embarked on big-dollar content expansions, Vimeo has unveiled a host of features designed to help broaden its appeal and strengthen the videos on the site—without expanding beyond its basic charter.

In October, for example, Vimeo unveiled a discount program, Vimeo Perks. Available to paying members of the site, Vimeo Perks gives video producers rebates on equipment and software from a variety of retailers. The company is also pushing aggressively into the mobile world; it already has an iPhone app that allows users to upload content to the site, and it's set to release a version for Android in the next couple of weeks.

Mellencamp insists Vimeo can compete without resorting to the high-profile partnerships with major content companies that Netflix and YouTube have turned to. "We believe the quality of what the average person can do is extraordinary," she said.

Others aren't so sure.

"Vimeo is in a precarious position," said Christopher Chute, a research manager in the worldwide digital imaging practice at market research firm IDC. "The industry is headed toward [a mixture] of user-generated content and paid professional content. In order to grow, they're going to have to be looking at specific partnerships with brands or studios. . . . It doesn't have to match YouTube, but it has to have something outside of what it has now."