How Vine made and lost over 200 Million Users?

Founded in June 2012 by Dom Hofmann, Rus Yusupov, and Colin Kroll, Vine was an idea was to build a platform on a simple yet compelling concept: Creating and Sharing six-second looping videos while recording through its in-app camera.

The camera would record only while the screen was being touched, enabling users to edit on the fly or create slow-motion effects.

Due to the novelty of its idea, Vine caught investor’s attention even before its official launch and was acquired by Twitter in October 2012 for a whopping $30 million.

It was officially launched in January 2013 and quickly gained popularity, especially among younger users. This was followed by the launch of its free mobile app for iOS and Android users in 2013.

Vine saw massive initial traction and rapidly grew to have millions of active users. By December 2015, it had over 200 million active users.

Breakthrough Product:

It attracted users from diverse backgrounds in music, comedy, journalism and pop culture.

• On February 1, 2013, a Turkish journalist used Vine to document the aftermath of the 2013 US embassy attack in Ankara.
• On September 9, 2013, Dunkin Donuts became the first company to use a single Vine as an entire television advertisement.
• in July 2013, a Vine was posted of women twerking the 2012 song “Don’t Drop That Thun Thun” and its overnight fame led the previously obscure song to peak at number 35 on the Billboard Top 100 list.
• Many brands and celebrities including Cadbury, and Logan Paul, used the service as a free platform for advertising their products, showing off exclusive content

However, there was an elephant in the room that nobody had addressed till then, but because of upcoming competition from the likes of Instagram, it started to feel the heat and investors started asking Tough questions about Vine’s strategy. It was then revealed that at the time of its launch, Vine's monetization strategies were not fully developed, its focus was purely on user growth and engagement.

Vine's monetiation strategies were never fully developed before Launch

The money flowing into Vine’s ecosystem was mostly direct sponsorships for the top content creators. Yet, Vine never attempted to include sponsorship solutions in the platform. Twitter tried to fix things by bringing in a social media talent agency to try to monetize indirectly, but this was just a band-aid for a deeper wound. The agency couldn’t incentivize its clients to stay on Vine instead of moving to other competitors, while a good monetization system could’ve been able to.

3 BIG QUESTIONS THAT VINE FAILED TO ANSWER

• HOW to be relevant in competition?: Vine faced intense competition from platforms like Instagram, which introduced video capabilities in June 2013 and soon what was its sole USP, became a common thing.
• HOW to make Money?: Vine struggled to develop a sustainable and profitable business model, they tried the advertisement route but it didn’t sustain long enough.
• HOW to moderate content on its platform?: The platform faced challenges in content moderation, particularly in filtering inappropriate content. The call to moderate became even louder for pornographic content.

In the absence of these answers, Vine started seeing a massive decline as people started to switch to other platforms, advertisers were the first to leave and content creators quickly followed suit.

Vine tried to reinvent itself through Vine Kids but didn’t find much success there and saw an even further decline in user engagement and growth.

Platforms such as Instagram began to introduce their own take on the short video angle, such as Instagram Video where users were able to upload 15-second videos to their profiles.

It also coincided with the changing digital media landscape, where a lot of monetary sources began to move to longer short video platforms.

In October 2016, Twitter announced that it would be discontinuing the Vine mobile app, primarily due to financial challenges.

There was also a popular belief that Twitter gave foster parent treatment to Vine as Its growth was never treated as a top priority. The company also had its own video feature that further diminished Vine’s existence.