What Quibi Has Gotten Right And Wrong So Far


Quibi’s woes started at the beginning.

Soon after the streaming video startup launched in April, advertisers that had made multimillion-dollar upfront commitments including Taco Bell, PepsiCo, Walmart and AB-In Bev pushed for new deal terms in light of Quibi’s disappointing download and viewership numbers.

While CEO Jeffrey Katzenberg blamed the coronavirus pandemic for the app’s underperformance, Quibi had also entered a competitive market without content that had a fan base, and its paid subscription business model was a tough sell to consumers who aren’t used to paying for short-form video with ads.

Here’s what Quibi has gotten right and wrong since its launch.

It promised a brand safe and premium environment

Advertisers welcomed Quibi’s promise of a brand safe, premium mobile app filled with hard-to-reach younger audiences, said Tim Hill, managing partner for integrated investment at UM. 

“I can’t think of another company that started from nothing and was able to get $150 million in commitments from advertisers,” he said. “That’s a pretty big achievement.”

That immediate buy-in had a lot to do with trust in Quibi’s co-founders, the entertainment mogul Jeffrey Katzenberg and former eBay and HP CEO Meg Whitman. The high-profile team generated a ton of interest, leading to deals inked directly with CMOs of big brands.

“They were really successful in getting big brands to make a bet on them,” Hill said.

Quibi also offered brands a unique sell with its professionally produced, ad-supported mobile video, especially as more ad-free services hit the market. Plus, the company was trying something new and innovative to adapt to shifting consumer viewing habits.

“One of the fundamental strengths they have is a brand safe environment with quality contributors,” said Jed Meyer, managing director in North America at Ebiquity.

With those assets, Quibi signed on 10 Fortune 100 launch sponsors, who committed millions of dollars upfront for a year of 100% share of voice at a fixed rate. “Everything was predicated on how much they were able to deliver,” Hill said.

But it was advertiser-friendly, not user-friendly

While Quibi’s offer made perfect sense to buyers, it was confusing for consumers.

Younger audiences watch short-form video on YouTube and TikTok, but they don’t pay for it. And unlike Netflix or Amazon Prime, people won’t pay for entertainment platforms without a breakout hit or a back catalogue of popular shows.

“It’s not the same conversation as wanting to watch ‘Friends’ or ‘Grey’s Anatomy’ on Netflix,” said Ken Harlan, CEO of in-app advertising platform MobileFuse.

People will generally pay for content that lets them avoid ads, but not content that has ads included. (Hulu is an outlier – and it does have an ad-free tier).

“They really missed on the pricing model here,” Harlan said. “They should have a paid option and an advertiser-driven model.”

Because users didn’t follow, its promise of scale fell flat

By promising scale out of the gate, Quibi oversold itself to buyers.

Two months after its launch, the app has only been installed 4.6 million times and is pacing up to 30% behind on some commitments. Quibi projected 7 million paid subscribers within its first year.

Without the scale, Quibi’s not as attractive to buyers.

“Media [companies generally] build their audience before getting support from the advertising community,” Hill said. “They set the bar a little too high and bit off a little more than they could chew.”

Sheltering in place killed Quibi’s appeal

Quibi had to adapt to the less on-the-go world we live in due to the pandemic, and the loss of in-between moments – such as a long commute or waiting in line for a coffee – put the app in direct competition with streaming juggernauts including Netflix and Amazon Prime, as well as new services such as Peacock and HBO Max.

But there’s still time for Quibi to pivot. The company is working on a solution to cast its content to smart TVs to make it more accessible for living room viewing.

Quibi could also consider extending its free trial and making its content more shareable on social to attract more viewers, Harlan said.

Plus, Quibi still hasn’t yet released breakout hit. After all, Hulu was around for 10 years before debuting “The Handmaids Tale.”

“All they need is one hit that everyone is talking about,” Meyer said. “They haven’t had that moment yet.”

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  1. The streaming lines have been drawn. You either provide ad free content at a subscription price or endure ads to watch something on demand. I believe Tidal is feeling a similar pain trying to penetrate a streaming market with an abnormal consumer model. Streaming consumers dont want complexity or ads but will take the latter to avoid the former but not if they have to pay for [advertisement] pain.

  2. Quibi was mostly doomed out the gate. There was very little organic buzz. They had no back catalogue, no desktop app, no way to test it out for free, and while they had some neat IPs like Reno 911 (a personal favorite), people aren’t gonna pay a subscription fee unless there’s something there they’re dying to see, and while reboots cult classics are good shoulder programming, they’re only gonna go so far.

    What’s more, there’s already an extreme amount of content for people killing time in line or on the subway or on the toilet. It’s called YouTube. If you want people to pay money, you can’t just be a time killer, you need to be a destination.

    The idea isn’t totally awful, but the approach is wrong. Quibi may have made a big splash inside Hollywood, but their visibility in the mainstream is extremely low. So if they’re gonna salvage that, they need to work on that first. What’s more, Hulu already made a handy blueprint: you go with three tiers. 1) The free tier with more advertising and a lot less content. The sampler tier, if you will. 2) The paid subscript tier they’re using now with less advertising and all their content. 3) The more expensive ad-free tier.

    After that, they need a desktop app or website portal (or both), and ways to get on the living room tv. Through smartcasting, through Roku, and though PS4s and XBox Ones (and their upcoming successors). Or at least the desktop app and website portal. Accessibility is key. If it’s a chore to find them, people are much less likely to give them a chance. This is particularly ironic when this is a platform whose core concept is being convenient to watch, low-effort viewing.

    Finally, if their format makes back catalogues prohibitive, then maybe produce some spinoffs of existing IPs, and not just cult classics. A Parks & Rec spinoff could be something people seek out. Or an X-Files spinoff. Or a Star Trek series. Anything with a large and passionate fanbase. People will seek that stuff out, and then get exposed to Quibi’s original programming and maybe decide to stick around.

    But right now they aren’t very accessible, and at least as bad, there’s just not much of a hook. This thing shot itself in the foot even before the pandemic.