Quibi and Snap are Moving in Opposite Directions in Mobile VideoWednesday, October 21, 2020, 11:45 AM ET|Posted by Will Richmond
Quibi and Snap appear to be two companies moving in opposite directions in mobile video. Quibi, the high-profile, well-funded startup, has belatedly broadened its scope beyond mobile, enabling its app on Fire TV, Apple TV and Android TV, a recognition that a pure-play mobile video offering from scratch is unsustainable, especially during Covid.
The Information also reported yesterday that Quibi has unsuccessfully shopped its content catalog to NBCU and Facebook and that founder Jeffrey Katzenberg has told people he may have to shut down the company. This follows a WSJ report from late September that Quibi was seeking a buyer for the whole company. Previous reports revealed that initial advertisers were seeking to revamp their deals, due to smaller audiences and lagging app downloads.
There’s no doubt Quibi has been impacted by Covid keeping people at home. But as I wrote earlier this year, Quibi’s pricing, audience and content strategies all missed the mark. It should have offered a free, ad-supported tier of content, targeted a younger audience, and produced less expensive content. Not doing so has cost Quibi a lot of time and money.
Snap was one of the key Quibi competitors I had pointed out and the company reported strong Q3 earnings yesterday, underscoring how divergent it and Quibi’s paths are right now. Snap reported 18% year-over-year growth in daily active users to 249 million, as revenue surged 52% to $679 million.
Snap started as a user-generated mobile content and social media company strongly targeted to Gen Z and millennials. Snap continues to innovate, focusing on the camera and augmented reality. But it has expanded beyond user-generated content especially with its Discover feature for professional content. As The Information pointed out a few months ago, Discover has benefited from breaking news videos about Covid (and more recently about the election most likely).
In its report Snap said that over 50 million users watch “content derived from TV” each month. It said time spent with its “Shows” feature jumped over 50% year-over-year, and its “VS The World” second season has reached 14 million viewers. Internationally, Snap said Discover viewership was up 50% in Q3 vs Q2, and that over two-thirds of Gen Z and millennial users in France and the UK watch Discover. It’s worth noting all of this content is free to users.
Snap also elaborated on its investment in ad products and how these are contributing to its strong monetization and growing content partnerships.
In short, Snap is growing into premium mobile video leveraging its massive user base and roots in UGC. It’s taken some time for Snap to find its footing in premium content but it appears to be doing so. On the other hand, Quibi tried to immediately establish a paid, premium content model, without a user base to build from, which is a very difficult to road to pursue, especially given the huge variety of free content choices consumers have.
Update: the WSJ has reported that Quibi is shutting down. Quibi has released a statement.
Categories: Mobile Video, Social Media