Quibi’s Approach Misses the MarkThursday, January 9, 2020, 11:17 AM ET|Posted by Will Richmond
It’s been hard to avoid reviews and prognostications about Quibi over the past 24 hours since it further pulled back the curtain on its April launch plans. Quibi is the startup mobile video service from Jeffrey Katzenberg (Disney and DreamWorks) and Meg Whitman (eBay and HP) that has raised $1.4 billion (including $400 million just announced) from virtually every Hollywood studio and others.
Quibi will charge $5/mo for its ad-supported tier, and $8/mo for its ad-free tier. Quibi will have 50-60 shows at launch, which will grow to 175 originals within a year. There are “movies told in chapters,” “episodic, unscripted and docs,” and “daily essentials.” The movie content is longest, at 7-10 minutes per clip, with the others targeted for 5-6 minutes per clip. Quibi’s aiming to launch 3 hours of content per day, with the vast majority of it being daily essentials (basically news and information).
Quibi is delivered via a mobile app with feed format. There’s no web site and no CTV apps. It’s targeted to 18-34 year-olds. The big tech innovation is called “Turnstyle” which lets users toggle seamlessly between portrait or landscape mode; all video be shot in each mode, with the same soundtrack overlaid. I haven’t seen the demo but here’s I size things up so far:
Paid-only model is a huge barrier
Katzenberg told The Verge, “We’re competing against free.” If that’s the case, then shouldn’t there be a tier of Qubi that is also free? It would allow potential subscribers to sample and get hooked. There’s nothing new about the “freemium” model, it’s well-understood and it’s worked across many categories. What would be new is a mobile-only video service offering only paid options - and succeeding.
Targeting too old an age group
Whitman told Axios that “our audience is 18-34 year-olds…” That’s way too old. Quibi’s core target should be 13-20 year-olds, maybe even 10-20 year-olds. Smartphones are extensions of pre-teens’ and teens’ bodies; no other age groups are as attached. The Quibi team should spend more time scrolling through TikTok, as I did during the holidays, an experience that is truly brain-numbing. Practically all the content is created by sub 20 year-olds, for other sub 20 year-olds (And by the way, where are the ads on TikTok? How does it make money?). This is the mobile video generation; Quibi shouldn’t even be thinking about targeting anyone over age 20 for now.
Content misaligned and too expensive
The choice of who to target drives the kind of content being created and how finite dollars are spent. Quibi’s bringing a Hollywood-centric content mentality - if you had the word “premium” on your buzzword bingo board, you surely would have won after reading 2-3 Quibi interviews in the past 24 hours. But while 10-20 year-olds love Netflix, Hulu, etc, they also love Instagram, Snap, YouTube for mobile. Content on these services is short, raw, authentic, personal, silly and low-budget - basically everything Hollywood premium content isn’t. Quibi’s going to spend upwards of $7.5 million per episode (that's “Game of Thrones” type money) to compete for the attention of 13 year-olds who are currently watching other 13 year-olds do the same silly dance on TikTok. How does Hollywood compete with that and win?
I like Quibi’s ambition to disrupt mobile video, but its pricing, audience and content strategies are reducing its odds of success. My hunch is that Quibi will revamp all of them within 6 months of launching. Depending how much money it has left at that point and how willing investors - and key team members - are to soldier on will determine if Quibi has a real shot at success or will join the crowded landscape of over-hyped, but ultimately unsuccessful, mobile video startups.
Categories: Mobile Video, Startups