According to the recent announcement by Vidme, the video-sharing company has finally decided to shut down its operations due to intense competition from tech giants like Google and Facebook. This user-generated video service has been closed due to its inability to devise an effective revenue model that could make lucrative gains for the company. The neck-to-neck competition from YouTube and Facebook led to the contraction of the consumer base for Vidmen which eventually became the reason for its shutdown.
The announcement made by the Vidme has finally instructed that new signups and video uploads will be halted from Friday, and the services will finally close down by 15th December. With the closure of its operations, Vidme will end the paid subscription of all its consumers. Only videos made by the subscribers will be allowed to be accessed by the video owners and producers. The company has categorically stated that any outstanding balances will be cleared off by paying the verified customers within the time span of 2 months.
The company was found in 2014 and received a massive funding of around $6 million for further expansion and development of the platform. The aim of this startup was to build a platform for users that was equivalent to the standards and vastness of YouTube and Reddit.
Vidme’s co-founder, Warren Shaeffer, stated that,
Unfortunately we didn’t see a path to sustainability as an independent VOD platform in the face of competition from both Google and Facebook,
The epitome of this problem can be originated from the lack of funds that the company was able to generate to survive and grow in the market. Due to the lack of consumer base of the Vidme platform, the revenues generated weren’t sufficient enough to bear the operational expenses of the company. As the advertisements reduced on the platform and the infrastructure expenditures increased, the company lost its track and failed to meet the costs leading to a deficit. Vidme was able to augment its capital base up to $9.2 million from venture capitalist firms like Upfront Ventures, First Round Capital, and several other companies.
The company still has significant funds left but the company has permanently hampered its own operations and plans to introduce a new service the next year.