Vine Shutdown: What Does it Mean for Twitter?

“While Vine had its potential in creativity and monetization, it failed to innovate beyond its core offerings and grow its user base in order to protect itself from rivals.”

Photo courtesy of The Wall Street Journal.

Written by Lauren Tai, Class of 2017

On October 27, Twitter announced its plans to shut down its short-video sharing app Vine, which was popularized for its 6-second video loops. The app allowed users to capture casual moments in their everyday lives and broadcast them to friends, changing the way people went about storytelling while paving the way for countless memes and a plethora of cultural references.

Without disclosing a precise date, the company stated that the discontinuance of the video uploading feature will take place “in the coming months,” while all uploaded videos will remain preserved on the website. The announcement came in conjunction with Twitter’s overhaul of its core business as it prepares itself to be sold to potential buyers, in which it has not been so far successful as interested parties such as Disney, Google, and Salesforce have all backed out. The company also announced that it will be laying off 9 percent of its employees, about 350 people, across its sales and marketing departments in a push toward profitability. In its third-quarter letter to shareholders, Twitter stated that the restructuring, “allows us to continue to fully fund our highest priorities, while eliminating investment in non-core areas and driving greater efficiency.”

Twitter has been under pressure from shareholders and investors for a while now due to the company’s stagnant user growth and its failure to implement any significant new plans that could provide the company growth. Meanwhile, the company lost more than $500 million in 2015 and has been struggling with profitability year over year. Without a takeover in sight any time soon, this move to end Vine and cut headcount is a strong signal of a potential turnaround for the company, with a refocus on its core business and an increase in its bottom-line through cost-cutting.

Vine was bought by Twitter in October 2012 for $30 million and was the pioneer of short-form video before Instagram and Snapchat took over. While Vine had its potential in creativity and monetization, it failed to innovate beyond its core offerings and grow its user base in order to protect itself from rivals. After peaking in 2014 with X million active users, Vine reportedly had around 200 million active users in Oct 2015. Since then, Vine usership had been on a downwards trajectory after Instagram, which introduced its video-sharing features in June 2013, and Snapchat emerged as the primary mass-market video sharing app among friends.

In addition, Vine struggled to retain its popular creators on its platform, as over half of its top 9,725 accounts either deleted their profiles or stopped posting since the start of 2016, according to research done by Makerly. From a report by The Wall Street Journal, Vine’s stars were found to be leaving Vine for competitors like Facebook, Instagram, and YouTube, taking their followers with them as they left.

Vine’s demise is mostly attributed to its unclear vision, failure to monetize and high rate of executives churn. While brands were once willing to pay Vine stars to create content that they could use to advertise their products to their millions of followers, they no longer saw it as a competitive platform once Instagram and Snapchat grew their base to hundreds of millions of active daily users. Whereas Instagram increased the limit on videos from 15 to 60-seconds, allowing celebrities to be promoted through the “explore” tab, and Snapchat introduced the “stories” concept, allowing users to send 10 second videos to friends privately and also broadcast publicly, Vine did not move fast enough to differentiate itself. Although Vine loosened its 6-second video limit earlier this year, it could not gain traction as Snapchat and Instagram took over as the main lifecasting apps used by people. Vine, once a leader in social video, was unable to revive itself due to its failure to add new features that could compete with its rivals, and consequently was shut down by Twitter.

Now, Twitter is stated to be refocusing on its core live streaming capabilities through its main product Periscope, in an attempt to compete with Facebook Live, and also to better leverage its streaming capabilities for events. With a new, content-heavy strategy in mind, Twitter made bold moves towards streaming by signing a deal with the National Football League to stream Thursday night games. Twitter is also looking to do the same for other sports, political events and entertainment, most recently proving it can pull off a new live stream format with its US Election special, which featured live streams of political channels alongside relevant tweets from users. Twitter hopes that its moves toward streaming and the video-first method of display will help attract new users. thereby eradicating the confusion of users setting up an account and then deciding whom to follow. The company hopes that this new strategy will make Twitter a more versatile platform that users would turn to on a more frequent basis.

With a valuation of more than $16 billion, Twitter is valuable for its data, but it needs to prove that it has potential to grow its user base before a potential buyer takes over. Though the Vine shut down comes as disheartening news to its once loyal fans, this move may give Twitter an opportunity to refocus its business model and improve upon its core offerings. This can perhaps provide Twitter with a more distinguished identity and a clear strategic direction as it prepares to find a buyer. Any buyer will have to take on Twitter with its new strategy but whether or not the refocus will grow its user base is yet to be seen.

Timeline of Vine and rise of other video-sharing platforms

2010

  • October 2010 – Instagram launches as a free mobile app

2011

  • July 2011 – Snapchat launches as an iOS-only app

2012

  • April 2012 – Facebook buys Instagram
  • June 2012 – Vine founded
  • October 2012 – Twitter buys Vine
  • December 2012 – Snapchat launches and adds video sharing capabilities to app

2013

  • January 2013 – Vine launched as a free app for Apple devices
  • June 2013 – Vine available for Android users
  • April 2013 – Vine became the most-downloaded free app in Apple App Store
  • October 2013 – Instagram announced it would begin featuring ads on the app
  • October 2013 – Snapchat launches Snapchat Stories
  • December 2013 – Instagram launched Direct, allowing users to send other users photos
  • December 2013 – Snapchat allows users to replay one snap a day

2014

  • May 2014 – Vine launched web version
  • August 2014 – Snapchat adds “Live” section to platform
  • October 2014 – Snapchat announces it will begin publishing ads
  • November 2014 – Snapchat launches Snapcash

2015

  • January 2015 – Vine launched Vine Kids, app for children
  • January 2015 – Snapchat launches “Discover” to feature content from brands
  • August 2015 – Vine introduced Vine Music
  • October 2015 – Instagram launched Boomerang, an app to shoot one-second burst photos
  • October 2015 – Snapchat ads slow-mo, fast-forward and rewind filters

2016

  • March 2016 – Instagram extends video limit to 60 seconds
  • June 2016 – Vine expands video length limit to 140 seconds
  • July 2016 – Snapchat adds Snapchat Memories to its features, allowing users to post photos from camera roll to Snapchat Stories
  • August 2016 – Instagram launches Instagram Stories, similar to Snapchat Stories
  • October 2016 – Twitter announced it would discontinue Vine, but keep existing Vine content on its website

 

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