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Vimeo buys video streaming rival VHX

Do Not UseDo Not Use 2/05/2016

Vimeo will let video-makers set up their own subscription video streaming services similar to Amazon and Netflix, the firm has announced.

The video-sharing website said it had acquired streaming start-up VHX for an undisclosed sum.

Its white-label platform will let people launch their own-brand services, complete with smartphone apps and a website, using Vimeo's technology.

But an analyst said the video-streaming market was "increasingly crowded".

Prominent video-makers such as Disney, Showtime and HBO are turning to subscription online video to counter falling cable television revenues, as consumers increasingly reject expensive cable television packages.

Online talent agency Fullscreen and video giant YouTube have also launched "premium" services to bolster income.

"When it comes to longer form or premium productions, the economics of producing it on the free web just don't work out," Fullscreen founder George Strompolos told the BBC.

Industry analyst Tom Harrington of Enders said subscription services offered a "superior" experience for consumers.

"There's some great stuff on YouTube but there are hundreds of millions of hours of rubbish as well," he told the BBC.

"In terms of connecting to your intended audience, without distraction, an off-the-shelf streaming service would be superior.

"But, given that Vimeo has spent over a decade concentrating on creating a name and reputation synonymous with quality, the provision of white-label services seems a choice contrary to its business so far."

Vimeo chief executive Kerry Trainor said the online video industry was "expanding from a few, mainstream subscription services into a flourishing world of interest-based streaming channels" and that Vimeo would help establish the "next generation of premium video channels".

The company, which does not publish its earnings, said 1.2 million video purchases had been made on its website since it launched in 2004.

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