New York (TheStreet) -- Vimeo sits far behind behind Google's (GOOG) YouTube in revenue and number of viewers, but the online video service owned by Barry Dillers's IAC interactive (IACI) is eager to draw content creators away from its chief rivals and become profitable.
The New York-based company said it wants to give content creators the ability to charge a monthly fee for access to their videos. Many content creators have been asking for just such a service, and Greg Clayman, Vimeo's general manager of audience networks, said the move should make the service more attractive to developers and artists.
"We think there are new video creators and producers who this will attract to the platform," Clayman said.
Competitors like YouTube have business models that Clayman said don't focus on the producers. Vimeo currently shares 90% of its profits with its creators, Clayman said, pointing out that the new service lets producers move away from a reliance on advertising revenue and sets it apart from the competition.
IAC, known for its various online services including Tinder, Match.com, routinely grows Web sites before spinning them out as separately traded companies. Expedia (EXPE) in 2005 and Ticketmaster in 2008 are two better known examples and Vimeo could be next, especially if the new subscription offering is successful. (Ticketmaster is now owned by Live Nation Entertainment (LYV).)
And while Vimeo leads IAC's fast-growing media group and its revenue jumped 20% in the first quarter to $43 million, that unit lost $15.4 million. The new subscription service may be a chance for the media group to become profitable and attract more users, though its more than 160 million monthly viewer count is dwarfed by YouTube's roughly 1 billion visitor tally.