Amid Twitter Inc’s (NYSE:TWTR) latest earnings report yesterday came news that the company would shutter its popular endless looping short-form video sharing service, Vine.
The internet was ablaze with vitriol when the news broke. Reactions ranged from shock, to sadness, to anger. How could a service that as recently as December 2015 had 200 million daily active users get shut down?
The answer isn’t all that complicated, really. Twitter is in dire straits, Vine loses money, and the company simply can’t afford to keep it around anymore. Under pressure from its board of directors and shareholders, Twitter has to jettison just about everything that isn’t producing results right now. That includes employees as well, with the company saying it would shed 9% of its workforce.
How did Vine get to this point, though? The once promising service that offers six second videos — seemingly perfect for today’s attention deficient generation — at one time seemed to have a bright future.
The platform was acquired by Twitter before it ever went live, back in October 2012. The price was a reported $30 million — a seemingly steep price at the time for an unlaunched and unproven concept. But Vine quickly grew, and launched a horde of creative, humor-focused young video producers into the spotlight.
But then, in June 2013, Instagram added video. The service that previously offered nothing but square, low resolution photo sharing, with a handful of color filters, overnight became something much more. And its video time limit was 15 seconds, offering much more flexibility than Vine.
That was a crushing blow for Vine, as many users defected to “IG” overnight. Over the next few years, even more of Vine’s top users left. Some went to Facebook, others to YouTube, and many, many of them left for Snapchat. Thus began Vine’s inexorable decline, as the platform quickly became passè.
And that’s one thing Twitter simply can’t afford to be right now.
Twitter shares rose $0.07 (+0.40%) to $17.47 in premarket trading Friday. Year-to-date, TWTR has fallen 24.81%.