NEW YORK (TheStreet) -- When it comes to video-sharing, Vimeo, owned by IAC Interactive (IACI) , sits a distant second-place to Google's (GOOG) - Get Report YouTube. Vimeo's audience of 170 million is a full five times smaller than its rival, mirroring the size and statue of their respective parent companies.
But like any #2, Vimeo seeks to poke YouTube whenever it can, and such is the case with its announcement Thursday that it has entered into a deal with Walt Disney's (DIS) - Get Report Maker Studios, YouTube's largest content network, to produce exclusive short-form videos for rental or download.
Vimeo has agreed to fund and distribute original Maker Studio content on its site through 2015, and in something of a breakthrough, will be able to cross-market its platform to Maker's roughly 55,000 video channel operators. Vimeo, though, is largely focused on Maker's less well-known creators who might be eager to augment what they earn at YouTube's advertising-driven site by posting their work on Vimeo's video-on-demand platform.
Financial terms of the deal, which doesn't effect Maker's relationship with YouTube, weren't disclosed.
"We're excited to welcome Maker's incredible community of creators to the Vimeo On Demand platform, allowing them to bring their content to new audiences and earn more revenue through direct VOD sales," Vimeo CEO Kerry Trainor said in a statement.
Vimeo, which bills itself as a high-quality alternative to YouTube, has been bulking up its VOD offerings with independent film, most recently securing the release of Spike Lee's newest film Da Sweet Blood of Jesus for a month before it plays in theaters.
While Vimeo offers thousands of free videos and short films, its VOD offerings are produced by more than 30 million registered members who pay $60 to $200 per year to post their work on the site and receive 90% of all rental and download sales. Vimeo is betting that the attraction of a 90% cut will prompt some of Maker Studio's small channel operators to move their work to YouTube's rival.
Disney acquired Maker Studios in May for about $500 million in a deal aimed at giving the world's largest entertainment the ability to make short films and videos to promote larger projects such as Star Wars, particularly on mobile platforms.
Maker has also been responsible for producing short-form videos based on Disney's Marvel and Pixar characters as well as for its ABC channels.
Written by Leon Lazaroff in New York
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