Quibi: Keeping things too short?
Quibi is shutting down in less than six months after the launch of its streaming service, a failure for a startup that attracted some of the biggest Hollywood names. Quibi is short for "quick bites" and the platform was designed for people to watch short videos on their phones. Despite securing almost $2B in funding from Hollywood companies, including Disney and NBCUniversal, the service failed to catch on.
The idea was to show in 5- to 10-minute “chapters” for the smartphone screen. Quibi has been plagued with problems since its debut, facing the pandemic, lower-than-expected viewership, and even a lawsuit from a well-capitalized foe, Elliott Management.
Mr. Katzenberg, DreamWorks cofounder, and Ms. Meg Whitman, former eBay CEO, decided to shut down the company to return as much capital to investors as possible instead of prolonging the life of the company and risking the loss of more money, according to people familiar with the matter. Quibi will explore selling the rights to some of its content to other media and technology companies. Why do I think it failed?
Wrong Assumption: The premise of Quibi was based on an incorrect assumption about what consumers want. Just because they like watching Netflix, TikTok, and YouTube on their phones doesn’t mean watching content only on their phone by itself is exciting. What made Quibi different also made it dangerous. Just because audiences enjoyed watching content on their phone doesn’t mean the very idea of watching content on a phone was itself a hook or more like a hook enough to pay for a service that offers it. Nonetheless, seeing how shows were formatted for a phone - vertically or horizontally was interesting and we can expect more content around that.
Poor Content: Let’s face it - the shows weren’t good enough and none of them went viral. No SVOD platform, no matter how innovative the technology or elaborate the marketing, will work without content good enough for viewers to want to watch. The burden on the content is even more crucial when viewers have to pay to access it. One breakout hit is good to draw viewers to service and other breakouts after it to keep them hooked, but Quibi never had the first breakout. Having watchable shows an average content is a low bar to clear when Netflix, HBO, and Disney were going all out on original content. In times like these, you need to create a buzz with your show. They tried to do by having content from top tier talent, similar to what Apple+ did, but that times time to pick up. Disney+ has a lot of archival content that generations of fans around the world know and love for years and that has worked well for Disney in acquiring customers. Quibi never modernized on class IP available, and that was a big problem.
Limited social shareability: Another problem Quibi had was that it did not allow users to share videos or images from the app to social media. It also didn’t initially allow screenshots. It eventually reversed course on that decision, but by then it was probably too late. Quibi provided no apparatus with which its content could go viral. No memes. No trending hashtags, which are crucial today. It relied almost entirely on its own marketing to drive awareness. Netflix and Disney+ have similar protections in place, but they are Netflix and Disney+ and went around it to make their own content viral on social media. The platform underestimated word of mouth, and these factors limited the growth of Quibi.
No social or 2nd-screen features: It’s one thing to center the experience on mobile viewing—it’s another to make it so that consumers can’t watch the content any other way. It was, and remains, difficult to watch a Quibi with another person. That, combined with the early social media blackout when Quibi needed word-of-mouth the most, made the platforms content the least “shareable” of the new name-brand SVOD services that have debuted recently. It was already a competitive landscape, and Quibi made it exponentially harder on itself by limiting the viewing experience.
(Not the) Pandemic: Sure, the pandemic affected Quibi’s launch, but the initial pitch could have been modified seeing how the pandemic was shaping up. The company’s original pitch to consumers—bite-sized premium video content you can watch on-the-go or during those “in-between” moments of your day—may have played better when consumers were actually traveling and commuting but the consumers were using mobile videos even more during the lockdown. According to eMarketer, time spent on short-form video apps in March 2020 was up 54% from the previous year. It was just that, the consumers weren’t using Quibi.
In an interview with the New York Times, Katzerburg said, “I attribute everything that has gone wrong [with Quibi] to coronavirus. Everything.” But that isn’t entirely true. Since its debut in April, Quibi seemed destined for such an ending. It missed subscriber and viewership targets and in June was on pace to sign up only 2M paying subscribers by the end of the year (its goal was 7M+). How does that number compare to others? Disney+ has 60M subscribers, Netflix has 167M, YouTube has 2B monthly users, overwhelmingly majority of whom access the content via mobile app. The pandemic, which caused a change in lifestyles, didn’t help. But the core idea of the service was flawed. The shows and reality didn’t go viral, and the mere idea of new content that you can only watch on your phone is not by itself exciting. Quibi was going to be the gamechanger with a unique take on premium, Hollywood-centric mobile video and make money off it. Too bad it wasn’t.