It's a digital video partnership designed to shake up YouTube's stranglehold on the biggest video stars, and shift them away from ad-supported platform to an on-demand paid model. IAC's premium video platform, Vimeo, just struck a major deal with YouTube's biggest content network, Maker Studios, which Disney purchased last year.
The companies are collaborating to fund exclusive content for Vimeo on Demand. That means Maker creators will sell content on Vimeo, before they make it available for free—with ads—on YouTube. In addition to the funding, Vimeo will offer its tools as a service to Maker's 55,000 creators to convert them to publishing on Vimeo's platform.
The key: YouTube takes a roughly 45 percent cut of ad revenue, while Vimeo takes a 10 percent cut of video-on-demand fees. And on Vimeo, a creator can set whatever fee he or she likes—say $5 for a rental, $10 to own a video. In contrast, ad fees on YouTube are often in the range of $2 per 1,000 views.