Vimeo LLC is making a big leap into live video with the acquisition of Brooklyn-based live content streaming site Livestream.
Terms of the deal weren't announced, but New York-based Vimeo, a subsidiary of Barry Dillar's IAC/InterActiveCorp. (IAC) - Get Report , told the Hollywood Reporter that it is the largest acquisition in its history. Vimeo noted that it expects the deal to close early in the fiscal fourth quarter.
Livestream's live video software and hardware will be integrated into Vimeo to provide an end-to-end video service for professionals, businesses and organizations, Vimeo said. The YouTube competitor also announced on Tuesday that it's launching its own Vimeo Live product, a move that will bring live-streaming capabilities to the video hosting website for the first time ever.
"Live streaming is the #1 request from our creator community this year, and we're focused on bringing a new level of quality, convenience and craft to this evolving medium," said Vimeo CEO Anjali Sud in a statement. "...We are excited to take a leadership role in this large and growing market, and look forward to quickly making our mark."
The deal signifies one of Sud's first major moves since she took over as chief executive from former CEO Kerry Trainor in July. Trainor in August was named CEO of beleaguered music streaming site SoundCloud Ltd. By joining Vimeo, Sud inherited a video platform that continues to show modest growth -- in the fiscal second quarter, Vimeo said it had 828,000 subscribers, which is a 15% increase year-over-year.
In the last few years, Vimeo has transitioned from being a niche haven for indie film makers and into a growing destination for original internet series. Vimeo's first On Demand series, "High Maintenance," became so popular that Time Warner's (TWX) HBO picked up the show's third season for distribution on its network. The success prompted Vimeo to announce plans for a subscription video service that would allow it to "follow in Netflix Inc.'s (NFLX) - Get Report footsteps" and called for a budget tens of millions of dollars. Vimeo had also hired Paramount Pictures executive Alana Mayo to head up its original content efforts.
More of What's Trending on TheStreet:
- No Other Senior Adidas Executives Involved in Bribery Scandal--U.S. Attorney
- Here's What a Blockbuster Combination of Sprint and T-Mobile Would Look Like
- 'The Wolf of Wall Street' Jordan Belfort on Financial Fraud and Bitcoin
- Marketing Experts Debate Whether Brands Like Nike Should Take Stance on NFL
Ultimately, Vimeo scrapped those plans for a video streaming service, choosing instead to focus on its creator community.
Meanwhile, Vimeo's larger and richer rivals like Alphabet Inc.'s (GOOGL) - Get Report YouTube, Facebook Inc. (FB) - Get Report and Twitter Inc. (TWTR) - Get Report have bolstered their video offerings with live streaming features. Vimeo has stuck with a focus on video uploading and sharing and, as a result, started to fade into obscurity in the larger conversation about digital content.
Vimeo Live should help the company regain some footing. The Live product will be offered via annual and monthly paid membership subscriptions and for a variety of prices, according to TechCrunch.
Privately held Livestream, founded in 2007, had raised $14.7 million from investors including Gannett Co. Inc. Similar to Vimeo Live, Livestream moved to a subscription-based service in 2016. Prior to that, it ran on a free, ad-supported model.
Vimeo parent IAC received legal advice from a Williams Mullen team led by Laurence Parker Jr.
A Citigroup Inc. team led by Israel Halpert and Eish Dhillon provided financial advice to Livestream. The target received legal counsel from a Cooley LLP team led by Adam Dinow.