All Failed Startup Stories
Vine

Vine

Social Media

General Information

Industry Social Media Country United States Started in 2013

Failure

Outcome Shut Down Cause Slow Strategic Adaptability Closed in 2017

People

Founders 3 Employees 50-100

Funding

Funding Rounds 1 Funding Raised $3 Million Investors 1

What is Vine?

Vine was an American video hosting service that allowed its users to create and share short-form content in the form of 6-second looping videos. It was founded in 2012, and eventually became one of the world’s most popular media platforms, amassing 200 million active users during its peak.

If you were an active internet user in 2013-2014, which was also Vine’s peak era, you too would’ve been super confident of the gold mine Twitter had in the palm of its hands. However, in a matter of months, that faith was completely squandered.

Vine's descent was a slow burn that occurred right in front of our eyes, as we all subconsciously moved on to other platforms. So when Twitter announced Vine would be discontinuing its operations, it didn’t catch a lot of people off-guard.

But I think, when we reminisce about the early and mid-2010s, we still passively wonder: what happened? why did vine shut down? And more importantly, when did vine shut down?

The start of Vine

Vine was founded in 2012 in New York City by its three founders – Colin Kroll, Dom Hofmann, and Rus Yusupov. It was initially envisioned as a video editing tool; however, after a positive test run with a small user base, they decided to integrate a social component into it.

With a fear of losing the users' attention due to buffering issues, a 6-second time limit was set on its clips. But on its own, it was too short of a time to leave much of an imprint. It was then that the trio struck gold and decided to add a looping feature. Its looping feature made it easier to digest what you saw, and also stand out from anything out there at the time.

In its initial pitch to Twitter, Vine was sold as a social video platform. People could record, edit, and share intimate moments with their close friends. At that time, Instagram was limited to pictures and Youtube had captured the long-form video market.

In the fall of 2012, Twitter bought Vine before it even launched – for a reported $30 million. They were looking to replace the third-party video tools that were being used on their platform. It also probably didn't hurt that the looping 6-second idea aligned with Twitter’s foundation of short-form content.

The Rise of Vine

Vine was officially released in 2013, and a few months in, it took the world by storm. It was the most downloaded free app in the App store by April 2013. It became incredibly popular among teenagers and young adults, with 5 vines tweeted every second in that year.

With its unique format, it provided a new form of entertainment that the world could enjoy. Instead of serving as a deterrent, the 6-second cap pushed the limits of creativity and introduced innovative forms of content and inside jokes that are still prevalent in internet culture today.

It gave rise to a new generation of internet celebrities (‘Viners’) and their clips stood out from their competitors with their novel styles of videography and storytelling. It provided a new avenue for internet fame with all its top videos (‘vines’) cross-posted across different social media sites every day.

By the end of 2013, Vine had ended strong. With 40 million subscribers in its first year, Vine was heading into its Golden Age. There was a sense of optimism around the future of the company, and the possibilities seemed endless. So what went wrong?

So, what exactly caused Vine's downfall?

Heading into the new year of 2014, Vine was on an unparalleled ascent. But there were a few chinks in its shiny armour that were not adequately addressed. Had they avoided these missteps, Vine's future could've been a little different.

Monetization Problems

With new content churned out every day, it was obvious that the lifeblood of Vine’s ecosystem was its content creators. Innovations were introduced in every area: video editing, video upload, UI improvements, etc – all developed to make life easier for the creator cohort.

However, Vine missed the mark on the most important area of them all: Monetization. Vine was very much reluctant to solve their BIG monetization problem. They weren’t making any money, and they did not offer any solutions for their creators to make money either.

Viners eventually began making money through branded posts and sponsorship deals. But these deals were negotiated and carried out individually. Vine did not intervene to make this process streamlined or easy.

Emerging Competition

Vine’s successful launch proved the existence of an audience eager to consume short-form content. Naturally, with the rules of the free market, competitors jumped right in to get in on the action.

Facebook was Vine’s biggest competitor. It started by banning all Vine content across its platforms. It then followed this by introducing the 15-second video feature on Instagram and incorporated this feature into the Facebook Instagram circle.

Vine’s second-biggest competitor in the jungle was Snapchat. Starting as a video messaging tool, Snapchat also began engaging in video content after gaining traction. It expanded the messaging feature by allowing videos to be posted publicly.

Reluctance to adapt

Another factor that could be characterized as a misstep was sticking to the time cap for far too long. With the 6 second format, Vine was envisioned as a social media, but once it came out, it was refashioned by the public as an entertainment platform.

Vine failed to recognize this. Or even if it did, chose to ignore it. With its newfound utility, Vine should have repurposed itself to enable the expansion of the content put on its platform - namely by removing the 6-second cap.

However, Vine stuck to its guns and did not incorporate any such change. When it eventually increased the time limit – from 6 to 140 seconds, it was too late.

Lack of Leadership and Low Retention of the Vine Founding Team

It can be hard for a team to have a stable direction when the leadership is plagued with tumultuous turnovers. This can especially be disconcerting when the capsized personnel are the founding members. Unfortunately, this was the case once Twitter bought Vine.

In January 2014, Dom Hoffman stepped down from his role as general manager to start his own business. Colin Kroll, who was his replacement, walked off from the position in 3 short months. The last remaining member, Rus Yusupov, was laid off from the team during Twitter’s broader restructuring in 2015.

The Beginning of the End

These 4 factors would eventually snowball into two main outcomes which would knock down Vine in 2016.

Creators Jumping Ship

Although Vine was a great launching pad for creators, it was not a sustainable platform to maintain their careers. With no secure monetization options, all this effort put into each new vine project did not seem like a productive avenue for their hard work.

There was also a growing discontentment among the vine community with the 6 second time limit. Creatively, they felt constrained, as they were unable to experiment with new styles of content.

With increased flexibility, a comparable audience, and a potential for more lucrative deals, switching platforms seemed like an optimal option for its top contributors.

Advertisers Lose Interest

As previously mentioned, Vine was not making any money, nor did they try hard enough to make money. They didn’t offer any real options for advertisers to market their products. With no reliable avenue for advertising, companies usually counted on individual sponsorship deals to sell.

When these creators started jumping ship, they took a portion of their audiences with them, chipping away at Vine’s user base. As more creators began switching platforms, Vine took exponential hits to its audience count, and as a result, started losing relevance.

Advertisers already weren’t so bullish on their prospects on Vine. They found the 6-second limit too short to tell a story about their brand. With Vine's top creators fleeing the platform, advertisers had no reason to stay.

Vine did try to make reforms and win over these advertisers during 2015-16. But, by that time, over 15000 of Vine’s creators hadn’t created content on the platform for a year. So, it’s safe to say, their attempts were too late.

Vine’s Descent

By 2015, Vine was plummeting, and it just couldn’t compete anymore. Vine just hadn’t caught on like it needed to. While it had a successful start in 2013, it never expanded beyond its millennial user base.

Additionally, with no stable revenue structure and a reluctance to compromise on video length, it fell behind and just couldn’t keep up with the Goliaths that were Instagram and Youtube. All changes introduced to salvage the platform was a little too late and hence quite barren.

So when did Vine die?

The eventual death of Vine was triggered by Twitter’s financial problems. Parent company Twitter wasn’t penniless, but it wasn't profitable either. Maintaining Vine was an expense that just didn’t give any returns.

On October 27th, 2016, Vine released a statement that it would be discontinuing the app in the following months. Vine was eventually shut down on January 17, 2017. All of its videos are archived on the internet and available for viewing and download, but new videos can not be posted anymore.

In Retrospect

As is the case for most of us, our hindsight vision is usually 20/20. So looking back, what could Vine have done differently?

The only way Vine could have lived to compete with giants like YouTube, Instagram and TikTok was if they had focused on

  1. Helping creators monetize their content on Vine. You see, creators love to create content but they keep coming back for all the sweet cash their efforts win on these platforms.
  2. Developed a proper ad network.
  3. Recognized and amplified trends that ultimately made YouTube and even TikTok reach their pinnacle.

One example of such a trend is simply the largely adopted lip sync trend that made up Musically’s entire working model. Musically, of course, was later bought by TikTok’s parent company ByteDance!

Twitter and Vine

In the end, the only ultimate reason that pushed Twitter to shut down Vine was the fact that it wasn’t bringing any money.

But, it seems like monetization is not a Vine problem BUT a Twitter problem. Given Twitter also makes money through its ad revenue, they haven’t been able to crack the advertisement business like some of its other counterparts have.

More importantly, they missed the opportunity to truly dominate the short-video marketplace when they had the ACE, the OG short video app, that is Vine.

On the backs of the concept Vine created, TikTok, Instagram and YouTube make BILLIONS!

But, now, Twitter has a new CEO in the form of Elon Musk. And, Musk would like nothing more than to ruffle some feathers and earn back his $44B purchase of Twitter!

Will Musk resurrect Vine?

Now, one way to make money would be by bringing back Vine. And, Musk is surely considering that prospect.

On Oct 31st, Musk tweeted a poll asking his followers if he should bring back Vine. Out of 4.9M votes, ~70% said YES! MrBeast, the most subscribed YouTuber even gave Musk his blessings to stage Vine to directly compete with TikTok.

what happened to vine? why did vine fail? why did vine die?

Bringing back Vine won’t be easy. In fact, a group of Twitter engineers had already reviewed Vine’s code in the past. But, the code is obviously outdated given it's 10+ years old.

There are also so many considerations on how the resurrection would take place -

  • Would Vine be less like its 2014 version and more like TikTok’s clone (like Instagram is turning into)?
  • Will it be able to match ByteDance’s superior algorithm, features and everything that made TikTok a mega-hit?
  • Or will it bring something new to the short-form video space?
  • Musk even considered adding Vine as a part of Twitter and not a separate app.

Now, Musk’s attention on Vine could be him just brainstorming on a public forum. Or it could be a real possibility. No one actually knows the fate of Vine and for that matter the fate of Twitter. So, as startup enthusiasts, we can just closely watch how this unfolds!

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