Biz Failures

What Happened To Vine? Why Did It Shut Down?

Vine is a social media platform where users could upload 6-second videos and view them in loop format.

Vine was shut down due to insufficient support for its content creators. This was due to high competition, lack of advertising and monetization options, staff turnover, and issues at parent company Twitter.

Vine was founded in 2012 and quickly became one of the most popular video platforms worldwide. Vine was accessed by over 100 million people every month at its peak. Twitter shut down Vine in October 2016.

What was Vine?

Vine was a social networking platform that allowed users to upload and consume short-form videos.

Vine videos were only six seconds in length. However, Vine eventually increased the default video length to 130 second.

Vine videos can be either shot directly in the app and edited, or uploaded for easy consumption.

It worked exactly like any other social media platform. The platform allowed users to follow other creators and like content. Users could also experiment with hashtags.

Vine also created a feed-like interface which allowed users to find other creators. Creators would receive more exposure through the feed.

Vine is now available on both Android and iOS mobile devices, as well as through the platform’s website.

What happened to Vine?

Vine is based in New York City and was founded by Rus Yusupov, Colin Kroll, and Dom Hofmann in 2012.

They met during Jetsetter, a startup that specializes in travel e-commerce.

Kroll, a college dropout joined the startup to become CTO after two years as an engineer manager at Yahoo (2007-2009).

Kroll was viewed as a troublemaker. He was often seen calling out employees directly. Kroll’s managerial style was disliked by one employee.

Dom Hofmann was a software engineer for Kroll and eventually resigned to continue working on Vine.

Yusupov was a digital product designer and he convinced him to join him. Kroll’s genius was known by Yusupov and he convinced Hofmann to accept him as the third co-founder of the app.

Kroll and Hofmann made amends, and became good friends. Kroll joined the team and they began to code and design.

Vine was initially intended to be used for video editing, just like Instagram.

After testing the app with family and friends, the team decided to add a social component.

The team was also liked by family and friends. In the summer 2012, Twitter approached the team. The founders of the app had already sold it for $30 million in October 2012, mainly as shares. This was just before they launched.

Twitter decided to invest $30 million in an app that was not yet fully developed. Vine’s short-form video format fits Twitter’s strategy of showing content of the same type.

There were also many third-party platforms like TwitVid and Posterous that could be used to display video content on Twitter. Twitter’s goal was eventually to make these platforms obsolete and allow them to create video-supported tweets.

As part of the acquisition, Kroll, Hofmann and Yusupov joined Twitter. The app was developed by them, and finally released on January 23, rd 2013, for iOS devices.

Vine was well-received but also faced its fair share problems on launch day. People were signed on to other accounts due to server bugs. Also, video sharing to social media networks had to be disabled.

Vine was also blocked from accessing Facebook’s platform. Rumours began to circulate that Facebook was planning similar video editing capabilities for Instagram and its own platform.

Vine had already discovered its next problem less than a week after it launched. Vine users began to share pornographic content. The team quickly intervened and blocked all porn-related hashtags. They also raised the age requirement from 12+ years to 17+ years. Additionally, they hired more moderators to inspect the content for potential violations.

Vine quickly became the preferred app for teens, despite those minor hiccups. It topped Apple’s “Free App” charts in April 2013, three months after its launch.

The team launched the Android app in June. This greatly increased its 13 million-strong user base. Vine beat Instagram in Google Play Store a week after it launched on Android.

The team added features as requested by users, such as channels and enhanced video editing capabilities. By the end summer 2013, Vine had reached 40 million users.

The launch of a standalone website and a Windows phone application, along with 19 additional languages, and adjustments made from Instagram’s video product, capped off an extremely successful first year.

2014 didn’t start as well as 2013. Dom Hofmann, the co-founder, announced in January that he would be retiring from his position as general manager. Kroll will replace him.

Kroll lasted only three months and was eventually forced to resign in April. Kroll and Hofmann both moved to advisory roles in order to launch their own products.

Vine continued its rise despite the worrying leadership turnover. It had more than 100 million active users by August 2014. This made it one of the largest social media platforms in the world.

Vine was a success at the beginning, but Twitter’s CEO Dick Costolo stressed that there were no immediate plans to monetize it. This meant that creators of the platform didn’t have a reliable source to monetize their videos.

Vine attempted to address the lack of monetization opportunities by adding influencer-related features such as extra exposures on the feed or adding a tag like “Suggested Viners”.

The problems at Twitter’s parent company would continue to affect Vine. Twitter laid off 300+ employees to make it more profitable in October 2015. Rus Yusupov was one of those affected, he was the last member of the founding team.

Kroll and Yusupov started working quickly after being laid off. This led to the launch of HQ Trivia. Three years later, Kroll died tragically from a drug overdose in December 2018.

Hofmann was, however, rumored be working on a Vine competitor. The app, known as Byte was launched in January 2020.

Vine struggled in the meantime. Many of the major advertisers, such as Nike and Coca-Cola, had moved to other platforms like Instagram or Snapchat by the end 2015 Jason Toff, Vine’s general manger, was also fired by Kroll in January 2016.

Vine’s most influential users (and admittedly its backbone) had stopped posting content for half a year. The company had lost key staff members, along with its influencers, over the summer.

Even worse, Twitter employees were reported to have had access to sensitive Vine user data. Vine’s source code was also accidentally posted on the internet, which revealed more sensitive information.

In October 2016, Twitter announced that Vine would be shut down. Vine was officially shut down on January 18, the 2017. The app was eventually relaunched under Vine Camera. This hosted all existing videos and allowed users to continue to watch the previously created content.

Vine Shut down for Why?

Vine was shut down due to insufficient support for its content creators. This was caused by high levels of competition and lack of monetization options. Personnel turnover.

Let’s take a closer look at each one of these reasons below.

Support for Influencers

Vine’s biggest failure was due to the insufficient support it offered its key stakeholders, specifically the influencers.

Many of the biggest stars of YouTube had millions of fans. Many of their videos were viewed by millions.

Vine allowed creators to reach a huge audience, but they didn’t have any viable options for monetizing their audience.

Vine’s short-form video platform was not well suited for long product promotion. So, most influencers had no choice but to make sponsored videos for other brands.

After almost three years of making videos, and getting fed up with Vine’s lackluster support, they decided that it was time to move to more lucrative platforms like Instagram and YouTube.

YouTube for instance, allocates 55 percent of its advertising revenue to video creators, while keeping the remaining 45 per cent for themselves.

It supposedly met with its top influencers to demand $1.2 million in exchange for 12 unique videos per month. This was a move they believed would save Vine. Vine’s executives refused and allowed them to move on.

Vine remained stuck with its 6-second video format, despite the fact that it was not receiving monetary support. Many creators demanded that the default video length be changed to allow them to experiment with different types videos.

Vine changed its default video length in June 2016, from 6 seconds to 140 seconds. It was too late.

Concurrence

Instagram (visa-vis Facebook), copied Vine’s video features immediately after its launch, as previously stated.

Snapchat, a small startup that was just launched a few months before Vine’s unveiling had just been made public.

Both Snapchat and Instagram began to add video-related products to respective platforms over time.

In the case of Instagram, it was also integrated into the larger Facebook ecosystem. This allowed influencers to advertise on multiple platforms and allow them to be found.

Advertising

Vine has failed to help its influencers monetize their audiences. Vine also fails to provide tools that would enable brands to advertise on the platform.

Facebook allows you to target customers with specific data.

Vine was unable to offer any advertising options. It incorporated pre-roll ads, which are video ads that play before the clip. However, advertisers had moved on by then.

Due to the lack of advertising opportunities, brands had no choice but to rely on organic growth. For larger companies, this can often be more difficult. People like to follow others and not what they perceive as a dead organization.

Vine could have discovered advertising sooner if it had. This would have generated enough income to pay its creators. The platform would then have remained the same.

Turnover

Vine’s downfall was also due to high turnover of staff, particularly among the founding team.

Research shows founder-led businesses often outperform those managed by appointed executives.

This is due to the fact founders are often passionate about their customers and the industry. Their ownership stakes add an extra layer of motivation to drive the company to success.

Vine’s founding members, Kroll and Hofmann, left within one year of the launch. Yusupov was not the general manager of the company and was fired as part of a larger restructuring at Twitter.

Vine, apart from its founders experienced higher turnover in key roles. Vine could have been sold and not been able to offer the equity necessary to retain its early employees.

Twitter

Vine had to be shut down last but not least due to ongoing problems at Twitter, which it was purchased by in October 2012.

Twitter was struggling to meet investor expectations back then. Twitter’s stock price dropped to its lowest point ever because the firm failed to meet earnings expectations.

In July 2015, Chief Executive Officer Dick Costolo resigned. Jack Dorsey was eventually appointed as co-founder.

Twitter was forced to lay off significant amounts of its workforce, including Vine co-founder Yusupov, under Dorsey’s direction. The company also considered selling. Ev Williams, one Twitter co-founder and founder of the publishing platform Medium, publicly pressured Dorsey for a sale.

Vine was, in all likelihood, also closed down by Twitter because it couldn’t afford to invest the necessary financial resources to keep it running.

Who owns the vine?

Twitter owned Vine (technically still is) 100%. Vine was purchased by Twitter, a social media giant based in San Francisco, back in October 2012 for $30 Million.

The founders received a majority of their compensation in Twitter shares as part of the deal. These founders likely cash-cashed them out when Twitter went public on November 2013.

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