Barry Diller's IAC/InterActiveCorp is abandoning plans to create an on-demand video service that would have competed for eyeballs with Netflix, Hulu and HBO.

The service intended to entice Vimeo's more than 200 million viewers to pay for exclusive content. Vimeo will instead focus on a suite of tools for filmmakers.

Vimeo "has decided not to proceed in offering a subscription based original program service scheduled to begin in '18," a spokesperson at the video service said in an emailed statement Monday.

Creating a new paid video service would have been an expensive proposition in a crowded marketplace, especially since Vimeo was going up against more established companies with much fatter purses. Netflix will spend $6 billion this year on programming. Amazon spends about $4.5 billion annually, some analysts have estimated.

CEO Joey Levin said last year that he planned to spend "tens of millions" of dollars on programming for Vimeo's on-demand service, "not hundreds of millions." Originally slated to become available later this year, the launch date was pushed back in May to the first half of 2018 because more time was needed to source the "best content," Levin said.

Vimeo had also wanted to compete for a different kind of viewer -- those who had more niche interests and those seeking more provocative content. But there are already dozens of services charging people $5 to $15 a month for everything from anime to faith-based programming.

At the end of the first quarter, Vimeo had about 800,000 paying subscribers using its filmmaking tools.

-- Bloomberg News