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Vimeo buys VHX to build up its fledgling video subscription business

Two companies, both focused on indie video.

Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Vimeo, the video service that launched a feature that let video makers sell subscriptions to their stuff last year, has acquired VHX, a video tools startup that launched a feature that let video makers sell subscriptions to their stuff last year.

If you follow the business of indie video distribution very closely, you will know the difference between the two feature sets. For the rest of you, the important thing to know is that Vimeo CEO Kerry Trainor says VHX’s subscription offering is much more robust than the one he has. So he is picking up the company, its technology and all 22 of its employees.

Trainor wouldn’t disclose a purchase price, though Vimeo owner IAC isn’t known for paying rich multiples for its acquisitions. VHX had raised at least $10 million since 2010, including a $5 million round led by Comcast’s venture arm* in 2015.

Trainor says the idea is to use VHX’s service within Vimeo. “This isn’t an ‘acqhire,'” he said.

Vimeo’s free, basic service is still best known for the fact that it doesn’t have ads and that it tends to attract viewers and creators who appreciate words like “bespoke.” That means it’s much smaller than YouTube — it has 200 million monthly viewers while YouTube has well over a billion — but it’s still big enough to suggest that there’s a real business there.

For most of its life, Vimeo only made money by selling service subscriptions aimed at prosumers who wanted features like increased storage capacity; at the end of last year, it had 676,000 paid subs.

More recently, though, it began selling and renting videos, as a kind of indie iTunes — as VHX has done — and funding some content itself, like the pot delivery dramedy “High Maintenance” — which VHX didn’t do.

* Comcast owns NBCUniversal, which is a minority investor in Vox Media, which owns this site.

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