What Happened To Vine? Why Did It Shut Down?

Executive Summary:

Vine was a social media platform that allowed users to upload and watch 6-second videos in a loop format.

Vine shut down because it failed to support its content creators, due to high levels of competition, lack of monetization and advertising options, personnel turnover, as well as issues at parent company Twitter.

Founded in 2012, Vine eventually became one of the world’s most-frequented video platforms. At its peak, over 100 million people were accessing the platform every month.

What Was Vine?

Vine was a social media platform that let users create, upload, and consume short-form video content.

The videos on Vine were six seconds long. Nevertheless, the platform eventually extended its default video length to 130 seconds.

Videos on Vine could either be shot and edited directly within the app or simply be uploaded to be readily consumed.

The platform worked just like any other social media platform. Users could follow other creators, like content, and experiment with hashtags.

Vine, furthermore, created a feed-like interface that allowed users to discover other creators. Consequently, creators would also receive additional exposure via the feed.

Vine was made available as a mobile application (for both Android and iOS devices) as well as via the platform’s own website.

What Happened To Vine?

Vine, headquartered in New York City, was founded in 2012 by Dom Hofmann, Rus Yusupov, and Colin Kroll.

The three founders met each other during their time at Jetsetter, a travel e-commerce startup based in New York.

Kroll, a college dropout, joined the startup as CTO after spending two years working as an engineering manager at Yahoo (from 2007 to 2009).

Kroll was considered to be a difficult character (he often was seen and heard calling out people directly). One employee, in particular, took a dislike to his managerial style.

Dom Hofmann, who worked as a software engineer under Kroll, eventually handed in his resignation to work on the app that would eventually become Vine.

He convinced Yusupov, a digital product designer by trade, to join him. Yusupov, knowing of Kroll’s genius, eventually convinced Hofmann to welcome him as the app’s third co-founder.

Hofmann and Kroll made amends and eventually became close friends along the way. With Kroll on board, the team began coding and designing away.

In the beginning, much like Instagram for the photo use case, Vine was intended to be used as a video editing application.

The team, after testing the application with friends and family, settled on adding a social component to the app.

Friends and family weren’t the only ones liking what they saw, though. Social media giant Twitter approached the team in the summer of 2012. In October, the founders had sold their app for $30 million (being mostly compensated in shares) all before launching.

So why did Twitter decide to invest $30 million into an app that wasn’t even fully developed yet? For once, the short-form video format of Vine fits Twitter’s strategy in showing content that’s of the same nature.

Second, there were plenty of third-party platforms, namely TwitVid, Posterous, and Mobypicture, that were helping to display video content on Twitter. Twitter’s goal was to eventually make them obsolete and enable their own video-supported tweets.

Kroll, Hofmann, and Yusupov all joined Twitter as part of the acquisition. They continued developing the app, which was finally released on January 23rd, 2013 (for iOS devices only).

Despite being well-received, Vine also had its fair share of problems during launch day. For instance, server-related bugs led to people being signed onto other accounts. Video sharing to social networks had to be disabled as well.

To make matters worse, Facebook had begun to block Vine’s access to its platform. Soon after, rumors began emerging that Facebook was working on launching similar video editing capabilities for its own platform as well as Instagram.

Less than a week after the launch, Vine already stumbled upon its next problem. Users on the platform began sharing pornographic content. The team quickly intervened by blocking all porn-related hashtags, raising the age requirement from 12+ to 17+, and hiring more moderators to check the content for any potential violation.

Despite those hiccups, Vine soon emerged as the go-to app for teenagers. By April 2013, just three months after launching, it topped Apple’s ‘Free App’ charts.

In June, the team finally launched an Android app, which vastly expanded its 13-million-strong user base. A week after launching on Android, Vine surpassed Instagram in Google’s Play Store.

The team continued to add features that were demanded by its user base, including channels, a total redesign of the camera, as well as greater video editing capabilities. By the end of summer 2013, Vine had topped 40 million users.

Subsequent launches of a Windows phone app and standalone website, adding 19 new languages, as well as adjustments observed from Instagram’s video product capped off a very successful first year for the social media platform.

Unfortunately, 2014 did not begin as well as 2013 ended. In January, co-founder Dom Hofmann announced he would be stepping down from his role as general manager – with Kroll becoming his eventual replacement.

Kroll himself lasted all but three months in that position and ultimately stepped down in April. Both Hofmann and Kroll moved into advisory roles to focus on launching their own products.

In spite of the concerning leadership turnover, Vine continued to ascend. By August 2014, it counted over 100 million monthly active users, making it one of the world’s largest social media platforms.

Despite Vine’s early success, Twitter (then led by CEO Dick Costolo) emphasized that it did not have any near-term plans to monetize the platform. Consequently, that also meant that creators on the platform did not have a reliable source for monetizing their videos.

Vine tried to combat the lack of monetization opportunity by adding influencer-related features, such as additional exposures on the feed, or by adding a tag like “Suggested Viners”.

Troubles at parent company Twitter would continue to trickle down towards Vine. In October 2015, Twitter laid off 300+ employees in an effort to become profitable. One of the affected employees was Rus Yusupov, the last-standing member of the founding team.

Soon after being laid off, Kroll and Yusupov began working on their next venture, which led to the eventual launch of HQ Trivia. Kroll tragically died of a drug overdose three years later (in December 2018).

Hofmann, on the other hand, was rumored to be working on a Vine competitor. The app, which is known as Byte, was eventually launched in January 2020.

In the meantime, Vine continued to struggle. By the end of 2015, many of the large advertisers (such as Coca-Cola or Nike) had already moved on to competing platforms like Instagram and Snapchat. Vine’s general manager Jason Toff, who took over from Kroll, also left in January 2016.

Within another half a year, the majority of Vine’s influencers (and admittedly the platform’s backbone) stopped posting content as well. Alongside its influencers, key personnel had also departed the company over the summer.

To make matters worse, reports emerged that Twitter employees had been given access to sensible Vine user data. On top of that, Vine’s source code was accidentally published on the web, revealing further sensitive information.

Then, in October 2016, Twitter finally announced that it would shut down Vine. On January 18th, 2017, Vine was officially folded. The app was eventually relaunched as Vine Camera, which hosted all the existing videos, allowing users to continue to consume the previously created content.

Why Did Vine Shut Down?

Vine shut down because it failed to support its content creators, due to high levels of competition, lack of monetization and advertising options, personnel turnover, as well as issues at parent company Twitter.

Let’s look into each of these reasons in more detail below.

Influencer Support

The biggest reason why Vine failed was the lack of support that it provided to its key stakeholders, namely the influencers on the platform.

Some of its biggest stars had amassed millions of followers. Some of their videos were played in the tens of millions.

Despite the tremendous reach that Vine enabled them with, the creators did not have a viable option to monetize their audience.

Additionally, Vine’s short-form video platform did not really lend itself to lengthy product promotions. As such, most of the influencers had to resort to making sponsored videos for other brands.

And after almost three years of constantly making videos and being fed up with Vine’s lack of support, they decided to switch to more lucrative platforms – Instagram and YouTube in particular.

YouTube, for example, gives 55 percent of the advertising revenue to its video creators (while keeping the remaining 45 percent for themselves).

Towards Vine’s end, it supposedly held a meeting with some of its top influencers who demanded $1.2 million each in exchange for creating 12 unique videos per month – an effort they believed would’ve saved the platform. Vine’s executives declined and let them move on.

Apart from the lack of monetary support, Vine also remained stuck on its 6-second video format for too long. Many of the creators were demanding to change the default video length to be able to experiment with different types of videos.

Vine eventually changed its default video length back in June 2016 (from 6 seconds all the way up to 140 seconds). By that time, it was already too late.  

Competition

As previously stated, Instagram (vis-à-vis Facebook) immediately copied Vine’s video features after its launch.

A few months prior to Vine’s unveiling, a small startup called Snapchat had just been introduced to the public.

Over time, both Instagram and Snapchat began adding video-related products to their respective platforms.

Additionally, at least in the case of Instagram, its platform was being integrated into the wider Facebook ecosystem, which allowed influencers to advertise and be discovered on multiple platforms.

Advertising

Apart from not helping its influencers with monetizing their audience, Vine also failed to introduce tools that would allow brands to advertise on the platform.

For instance, Facebook’s platform allows brands to specifically target potential customers based on a variety of data, including age, gender, location, and even personal preferences.

Vine, meanwhile, barely offered any option to advertise. Towards the end of its existence, it incorporated pre-roll ads (video ads playing before the clip) but advertisers had already moved on.

As a result of the lacking advertising opportunities, brands had to rely on organic growth. This can, especially for larger organizations, oftentimes be a tougher endeavor. After all, people like to follow other people and not (as what they may perceive to be) a lifeless organization.

If Vine would have figured out advertising earlier on, it would have potentially generated enough income to compensate its creators, which in turn would’ve remained on the platform.

Turnover

Another contributor towards Vine’s demise was the high level of personnel turnover, especially amongst the founding team.

Research shows that founder-led companies oftentimes outperform organizations that are managed by appointed executives.

This is grounded in the fact that founders often possess abnormal levels of knowledge and passion about the customer as well as the industry. Furthermore, their substantial ownership stakes act as an additional layer of motivation to drive the business to success.

In the case of Vine, two of its founding members (Kroll and Hofmann) left within a year after the launch. Yusupov, who never led the firm as general manager, was even let go as part of a wider restructuring effort at parent company Twitter.

Apart from its founders, Vine also experienced higher levels of turnover among other key roles. One potential reason could be that the company had already been sold, thus not being able to provide early employees with the necessary equity to keep them around.

Twitter

Last but not least, Vine also had to shut down due to various ongoing issues at Twitter, the company it was acquired by in October 2012.

Back then, Twitter had struggled with meeting investor expectations. The firm was consistently missing earnings expectations, resulting in their lowest-ever stock price.

As a result, CEO Dick Costolo resigned in July 2015, ultimately being replaced by co-founder Jack Dorsey.

Under Dorsey’s leadership, Twitter had to lay off a significant amount of its workforce (including Vine co-founder Yusupov) while also contemplating a sale. Ev Williams, one of Twitter’s co-founders (and the founder and CEO of publishing platform Medium), even publicly pushed Dorsey to force a sale.

Vine, in all likeliness, was also shut down because Twitter could not afford to invest the necessary monetary resources to keep it going.

Who Owns Vine?

Vine was (and technically still is) wholly owned by Twitter. The San-Francisco-based social media giant acquired Vine back in October 2012 for $30 million.

As part of the deal, the founders were mostly compensated in Twitter shares. They likely cashed those out when Twitter went public in November 2013.

Hi folks, my name is Viktor! By day, I lead a tech team of 10 for an e-commerce startup. At night, I work on expressing my weird thoughts through this blog. And if there's time, I cuddle my cat..