At the most basic functions, Vimeo and YouTube offer the same services. However, there are some important details that make each distinct.
User Base and Content
YouTube has a large user base with more than 1 billion unique users visiting each month. For this reason, it’s a good idea to have content on YouTube, even if you are planning on putting it on another video hosting platform.
Vimeo has around 12 million unique users each month. This doesn’t tell the whole story though because the users are very different. YouTube is kind of like the Wild West. There is a HUGE variance in types of content: Everything from corporate videos, blogs, home videos and much, much more. Vimeo houses more content that is professionally produced. For instance if you search “cats” on YouTube, you get compilations of home videos of cats doing funny things. If you search “cats” on Vimeo, you get some animated cartoons, arts-y films, and a mini documentary about a cat owner and her pet.
Side note: Google+ is now fully integrated into YouTube so if you have an active G+ page, you could see some benefit from that as well.
Pricing
YouTube is free! Should your channel get popular, it also has monetization options involving ads that play before videos so you can make a little bit of money.
In order to post promotional videos on Vimeo, you must (in accordance with their user agreement) purchase a Vimeo Pro account. With the Pro account you gain the opportunity to brand a page (something YouTube does for free) as well as adding your logo to the video player (not an option with YouTube) and customizing the color. You also get access to Vimeo’s analytics, which some people say are better than YouTube’s. If you want something that is strictly free and still lets you customize, YouTube is the way to go. It really depends on what the goal of your video is. For most purposes, YouTube is the appropriate choice, but if you want to be in the company of high quality, artistic content, Vimeo should be in your future as well.
Honorable mention: Wistia
Wistia is strictly a hosting platform, not a community of video content creators. It is used to host videos on your website and that’s it. It’s geared specifically toward businesses that value data and want to know where, when, and how their videos are being watched. You can see what time of day your video is most active as well as when users stopped watching. You can add calls to action and collect email addresses. It is a paid service that offers some cool features and could be worth checking out.
Wherever you choose to host your videos, contest is the most important thing. Make sure your videos are engaging, informative, and well-produced.
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