From a dusty web relic to Showstopper: how Anjali Sud transformed Vimeo
Already growing rapidly, Vimeo has seen demand fueled by the pandemic. “Overnight, the video went from pleasant to essential,” explains Anjali Sud. Photo by Jamel Toppin for Forbes.
Seven years ago, Vimeo had Hollywood dreams. The internet video company, owned by Barry Diller’s IAC, had found a niche to host films for artistic filmmakers who didn’t want their works to be thrown into the unruly and publicity stew of YouTube. But it was a small business that was losing money with an annual turnover of less than $ 40 million. Vimeo was pinning its hopes on the burgeoning streaming business, betting it could leverage its relationship with creatives to create a subscription service rivaling Netflix, Amazon Prime, and HBO. He hired studio directors from Paramount and Hulu and signed distribution agreements with Lionsgate, CBS Interactive and Spike Lee for the content to store the new service.
But Anjali Sud, then Vimeo’s marketing director, 31, had a hunch that the company’s future was not in Hollywood hits but in Silicon Valley plumbing. His plan: to move from entertainment to entrepreneurs. “Vimeo had long been a software company for filmmakers, but the market was too small,” says Sud, now 37. “There was another, much bigger market: businesses. What Squarespace and GoDaddy did for websites, we could do with video.
She pitched the idea to Joey Levin, the CEO of IAC handpicked by Diller. “Anjali said, ‘This is a real business that caters to a much larger audience than you might think,” says Levin. He gave Sud a small team to test the idea. “We like to find smart, talented and ambitious people, throw them in the deep end and see if they can swim.”
South was soon backstroking, turning Vimeo from a dusty web relic into the highlight of IAC’s tech portfolio. A one-stop-shop for filming, editing, storing and distributing video, Vimeo reported sales of $ 84 million in the fourth quarter of 2020, a 54% increase from the same period the previous year. In the last quarter, the number of net subscribers increased by 300,000, to a total of 1.5 million, a gain of almost 25%. Annual sales are on track to exceed $ 300 million. IAC closed the streaming division in 2017 and appointed Sud as CEO.
In November 2020, Vimeo raised $ 150 million at a valuation of $ 2.8 billion from Thrive Capital and GIC, Singapore’s sovereign wealth fund. Just two months later, he got another $ 300 million at a nearly $ 6 billion valuation from T Rowe Price and San Francisco-based Oberndorf Enterprises.
This spring, IAC plans to sell Vimeo tax-free to shareholders. This will be Diller’s eighth spin-off. Over the past 25 years, IAC has incubated, rehabilitated, reversed and spun unsuitable web assets worth $ 100 billion, including well-known names like Match.com, Expedia and Angie’s List. The strategy worked: A dollar invested in IAC at the dawn of 1995 is now worth about $ 40, an annual compound return of 16% compared to the 10% return of the S&P 500 over the same time period. “In digital life and its possibilities, Vimeo isn’t even in the first round,” says Diller. “He has extraordinary potential.
Vimeo should be another spin-off star. In today’s cloud software market, Bank of America predicts that Vimeo (which IAC tried to offload to Kodak for about $ 10 million more than a decade ago) could reach a valuation of $ 10 billion, or approximately 50% of IAC’s current market capitalization.
For customers, Vimeo is a digital feather duster whose software enables them to deliver videos to social media, email marketing campaigns, websites, digital marketplaces, and streaming channels. Subscriptions start at $ 7 per month for a basic plan and climb to over $ 20,000 per month for large enterprise deployments at places like Amazon and Starbucks.
Because Vimeo is ad-free, its videos are licensed on ad-supported media like Facebook, LinkedIn, YouTube, Pinterest, and Twitter. The lack of advertising is also vital for distribution on online retailers like Amazon, Etsy, and Shopify. And Vimeo business customers don’t have to worry about random ads – or worse, those from competitors – appearing in the middle of their branded content.
Companies like Deloitte, Pottery Barn, Rite Aid and Forbes use Vimeo to deliver training and onboarding videos in addition to live company events to employees now located around the world. Meanwhile, over a million small businesses use Vimeo to deliver advertising, product demos, and how-to videos. Vimeo may not have been successful in launching its own streaming channel, but thousands of others, from independent filmmakers to Pilates instructors, are using it to create subscription channels on streaming services such as Apple. TV, Roku, Fire TV, and Xbox. Sud says, “We’re both a 16-year-old video platform and a three-year software startup. ”
Vimeo joined IAC in 2006 as a stowaway when Diller bought Connected Ventures, the parent company of lowbrow comedy site CollegeHumor. The $ 30 million deal included the comedy studio, its companion merchant site BustedTees, and Vimeo, the web reader for CollegeHumor’s sketches. “We bought Vimeo almost by accident,” says Levin of IAC. For much of the next decade, the company tried to make money from viewers through an iTunes-style on-demand service, and later on the hapless studio and streaming channel. Nothing really worked. “Vimeo has always had an identity crisis,” says Sud. “We had an amazing brand and platform, but it was hard to see what to do with it. ”
Sud certainly had the intelligence and credentials to give Vimeo a makeover. She was raised the daughter of two immigrant doctors in a close-knit Indian community in Flint, Michigan. After her public school lost its accreditation, South applied to 12 boarding schools and entered Massachusetts’ elite Phillips Academy Andover. Then came a degree from Wharton, then a few years of mergers at Sagent Advisors. Sud then attended Harvard Business School and worked at Amazon as a toy buyer and marketing at Diapers.com before joining Vimeo.
After a year of work, Sud began to see short commercials and product demos posted alongside the usual Vimeo documentaries and arthouse films. “It was everything from moms and dads to tech startups to the marketing departments of big companies,” she says. “They were so diverse, it had to be a trend.”
She found that new customers were using Vimeo to post marketing videos to Facebook, Twitter, Instagram, and their own websites. “There was a huge group of users that no one was serving.” His team has developed tools that allow businesses to upload logos, insert buy-it-now buttons, and add email capture to their videos. After a year of solid growth, IAC has added 50 additional people to the South skunkworks.
Spin Doctor: IAC founder Barry Diller (net worth $ 4.2 billion) made millions as a Hollywood mogul in the 1970s and 1980s, and billions on the internet over the decades that followed. “Once you focus with clarity, if your core idea is right, you flourish,” he says. “Vimeo has thrived.
As the software industry skyrocketed, Vimeo’s content studio collapsed. It was impossible to compete with giants with deep pockets like Amazon Prime Video and Netflix, which were pumping billions into movies and shows. In the summer of 2017, Levin told Sud that Vimeo was ditching the studio and getting into software, with Sud as CEO. “I never thought they would offer me the job,” says Sud. “I asked, ‘Is this a joke? Then I immediately tried to play cool.
Already growing rapidly – revenues grew 27% in the last quarter of 2019 – Vimeo saw demand fueled by the pandemic. “Overnight, the video went from enjoyable to essential,” explains Sud. As usage skyrocketed, she quickly hired to evolve Vimeo’s technology and customer service. Today, it has more than 700 employees, of which about half are in R&D and the rest are divided between sales, marketing and customer support.
South is now preparing for a post-Covid hybrid world of work in which it expects video dominance to accelerate. She wants to make virtual events and meetings more interactive, intimate and collaborative. Vimeo is also testing AI to edit raw footage into sleek marketing content for industries like restaurants and real estate.
Then there’s the impending spin-off. South says the move will make it easier to recruit talent, make acquisitions, promote the brand and sell services to large companies. (And access capital in a market that values software companies at around 40 times earnings.) As for going from marketing director to CEO of a publicly traded company in less than four years? “As a wife, mother and CEO of technology, I am unique in the software world,” says Sud. “I’m excited to bring my perspective and my style to the industry. It’s gonna be fun.”
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(This story appears in the June 4, 2021 issue of Forbes India. You can purchase our tablet version at Magzter.com. To visit our archives, click here.)