Video hosting site Vimeo has created a $10 million fund to invest in promising indie films, taking a strategy originally used by Netflix (Nasdaq: NFLX) to directly license films shown at independent film festivals and distribute them exclusively.
Indie filmmakers whose project premieres at one of the top 20 film festivals worldwide--such as Cannes, Sundance or SXSW--have a chance at investment from the fund, as do films that raise more than $10,000 in crowdfunding on Indiegogo, Kickstarter or Seed & Spark.
The move is a calculated leap into the content acquisition fray for Vimeo, a subscription-based online video service whose viewers pay between $60 and $199 per year to view videos without suffering through pre-roll ads or in-video ad banners and upload their own content. Vimeo began testing the investment model last year, announcing a $10,000 exclusive licensing offer at the Toronto Film Festival and, in January 2014, a $500,000 program to support crowdfunded films.
Films licensed through the new investment program will, for a 30-day window, only be viewable on the Vimeo On Demand platform. The filmmakers will receive direct payments through the licensing agreement, according to CNET, as well as marketing support including website development, and Vimeo will handle captioning and subtitling of the film.
Qualifying filmmakers also get a one-year subscription to Vimeo PRO, the service's top-tier subscription.
Vimeo's popularity, particularly with indie filmmakers, has surged in the past year, according to CNET. Unique views on the site grew 60 percent to 130 million between the end of 2012 and December 2013.
While Vimeo's content-uploading model skews it closer to Google (Nasdaq: GOOG)-owned YouTube than the Big Two online content distributors, Netflix and Amazon (Nasdaq: AMZN), its strategy of catering to independent filmmakers as a resource to showcase their work ahead of other distribution deals could give Vimeo an edge in acquiring original, exclusive content ahead of other online video services, as well as traditional film and linear television distributors.
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