In the early part of the 2010s, Vine, a new social media app that allowed users to share 6-second looping videos, started getting insane traction. The app became so popular that practically everyone under 30 seemed to be using it at one point in time. However, even though it saw early success, Vine was shut down indefinitely in 2017.
If you are a startup enthusiast or an aspiring entrepreneur, Vine’s rapid rise and sudden failure are worth studying because it teaches valuable startup lessons. To develop a deep understanding of the Vine saga, though, we need to look at the startup’s journey from the beginning and trace it all the way to its shutting down. This approach of tracing Vine’s complete journey will also help us better grasp the reasons that led to its demise.
What happened to Vine
In June 2012, Dom Hofmann, Rus Yusupov, and Colin Kroll, who met each other while working for Jetsetter, a travel startup based in New York, started Vine.
Before Vine launched, the three co-founders had envisioned that people would use the app to share casual life moments with friends. It was also a part of their pitch to Twitter, which acquired Vine for $30 million in October 2012, even before the app launched.
By limiting tweet character limits to 140 characters originally, Twitter created a space for itself as a microblogging platform. By limiting videos to 6 seconds, Vine was trying to position itself as a micro-vlogging platform. In that sense, Vine’s acquisition made sense because Vine’s 6-second video format would perfectly complement Twitter’s 140 character text format. Plus, Twitter did not have a video feature at the time, so maybe the Twitter team also thought Vine would help bolster their future video efforts.
After the acquisition, the Vine team continued their work ongoing the app and released the iOS version of the app in Jan 2013. Three months after the launch, Vine became the most downloaded free app within the iOS app store. The android version was released in June 2013, which further accelerated Vine’s growing popularity.
Users were so fascinated by the 6-second video format and the creative constraints enforced by the limited timing that they began to create bite-sized entertainment-driven and viral-type videos instead of the casual life update videos the founders had initially envisioned. Vine also gave rise to a new breed of social media celebrities, including big names like Sean Mendes, Lele Pons, Cameron Dallas, the Paul brothers, Ruth b, and many more.
By August 2013, Vine had close to 40 million registered users. A year later, by August 2014, Vine had grown to over 100 million monthly active users, putting the app in the group of large social media platforms. However, Vine got a major blow in 2014 after two of its co-founders, Dom Hofmann & Colin Kroll, left Vine in the same year.
For a social platform seeing the kind of user growth Vine was witnessing, the next logical step would have been to launch a self-serve advertising portal for advertisers to buy ads and reach Vine users. But Twitter’s (Vine’s parent company) position was that it did not have any immediate plans to monetize the platform. It also meant that creators with large audiences had to strike individual deals with brands without a reliable source for monetizing their content.
Another problem was that Vine and Twitter never truly integrated, and it was never clear how they should mix. To add to it, Twitter was itself going through a rough patch, which led to Twitter firing 300+ employees in 2015. Rus Yusupov, the last member of the founding team, was also among these employees fired.
In 2015, Vine started facing challenges as advertisers also began to leave the app for greener pastures like Instagram and Snapchat, leading to a fall in revenue for creators, which eventually led to star creators focussing on creating content on other platforms. As the star creators began to leave, consumers of their content also began to leave.
In October 2016, Twitter finally announced that it was shutting down Vine in a Medium post. In Jan 2017, Twitter launched an archive of all Vine videos that had even been published, but even the archive was discontinued in 2019.
Up until now, we have taken a brief look at Vine’s rise and subsequent fall. In the section below, we will go deeper into the exact reasons that led to the death of Vine.
Why did Vine Shut down/Why did Vine Die
Vine was shut down due to the following four main reasons: failure to introduce monetization avenues for creators, increase in competition and inability to innovate, founder and high-level leadership churn, and the financial struggles Twitter was facing at the same time.
Let’s take a look at each of these reasons individually:
One of the main reasons for the failure of Vine was the leadership level churn the company saw. In 2014, little more than a year Vine launched, Dom Hofmann & Colin Kroll, two co-founders, left the company.
Hofmann left first and was replaced by Kroll. But Kroll also stayed only for three months. After Kroll left, Vine was headed by Jason Toff, who quit in January 2016.
Twitter then gave Vine’s reins to Hannah Donovan, who had little experience running a company before taking the job. Hannah held the leadership until Vine was shut down.
In 2015, when Twitter laid down 300+ of its employees, it also fired the only remaining founder, Rus Yusupov.
As is evident from the leadership changes, the lack of not having a founding member clearly hurt Vine. To add to the leadership woes, Vine also saw many of its key executives leaving as well. Considering Vine had already been acquired, Vine could not provide early employees equity, which could have played a role in keeping them around.
The first major competitive blow to vine came when Instagram launched 15-second video clips in 2013. In some ways, Instagram video was the first nail in the coffin of Vine as the company wasn’t quick enough to differentiate itself.
Vine stuck to its original 6-second format throughout and only increased the video limit to 140 seconds in 2016, which turned out to be Vine’s last year. On the other hand, Instagram increased its video length limit to 1 minute and even beyond eventually. Instagram also began to attract Viners through the explore tab, which brought the kind of attention to creators that Vine couldn’t.
Apart from Instagram, Vine also faced competition from Snapchat, which became the casual mass-market lifecasting app the founders of Vine had envisioned Vine would become.
Lack of Monetization Avenues for Influencers
Any social media platform is kept alive by a small group of creators who create content for the larger group of content consumers.
Vine gave birth to the careers of many creators but it failed to provide the monetary support creators needed to continue creating content.
To better understand this, let’s take the example of YouTube. Thanks to YouTube’s advertising system, creators are given 55% of the advertising revenue YouTube generates through ads shown on their videos. Apart from this, creators also strike one-to-one promotion deals with brands and also receive direct monetary support from fans in some, if not all, cases.
In the case of Vine, because the company did not build a native advertising platform, creators only had to rely on one-to-one brand deals. But as brands began to turn their focus on platforms like Instagram & Snapchat, which provided superior advertising capabilities, creators were left with no way to monetize their content. Eventually, they redirected their Vine audience to other platforms like YouTube and, Instagram & Snapchat.
Close to the time Vine ended, the top creators also had a meeting with Vine, in which they demanded $1.2 million each for creating 12 unique videos every month. The creators thought this could save the dying platform, but Vine executives decided not to proceed with this deal. To add to this, Vine was also not quick to implement feature suggestions from creators, further agitating the creators.
In a typical scenario, a social media platform like Vine would have been funded by venture capitalists, who would have kept the platform flush with money as long as they believed they would get returns. They might have also pushed Vine to explore monetization avenues quickly.
With Twitter, though, the problem was that in the mid-2010s, the company was struggling to meet investor expectations, and the stock tumbled.
Due to dire financial health, then CEO Dick Costolo resigned in July 2015 and was eventually replaced by co-founder Jack Dorsey. When Dorsey took over, he had to lay down a huge number of people, including the last remaining co-founder of Vine.
The fact that Twitter was sizing down on employees and failing initiatives also meant that Vine’s death was fast-tracked. Had Twitter had money in the back, it could have tried harder to save Vine.
Despite Vine’s failure, the company remains an integral part of Internet history for pioneering the short-form video format. The success of Vine also led to the birth of some of the biggest creators. While Vine did bleed money throughout its existence, it also pushed the social media space towards videos, and for that, Vine can still be considered a successful failure.