Quibi: Hollywood and Silicon Valley’s $2 Billion Startup Baby Launched Last Week
Originally published at https://www.nealsivadas.com on March 30, 2020.
Amidst all the turmoil of the Coronavirus Pandemic, there’s a $2 Billion startup trying to transform the mobile entertainment and technology landscape that launched on April 6th.
It’s called Quibi, which is short for “Quick Bites.”, It is best described as a short-form streaming service specifically adapted for mobile viewing delivering movie-quality content from Hollywood’s biggest creators.
WHAT MAKES IT UNIQUE
1. Short — Form
Quibi is a streaming service delivering movie-quality content, just like Hulu, Disney+, and Netflix. However, instead of 30 minute or one-hour long episodes, each “chapter” is only 6–10 minutes long. Why short-form? They are trying to capture the void filled by endless social media scrolling, watching YouTube, and other “in-between” activities you spend on your mobile phone throughout the day between 7am and 7pm. Some examples include during your commute, waiting in line at Starbucks, at lunch, during a work break, between classes or meetings, or when you are just bored. The streaming service is making the argument that you WANT to watch movie-quality content during that “in-between” time; you just would rather not watch segments of a 30 minute or hour-long episode here and there. As a result, you are forced to scroll mindlessly through social media or do other non-structured activities to pass time. Quibi is offering for it to be “time well spent.”
2. Mobile — Only
Since 2011, the average time Americans have spent on their mobile phones has gone from 45 minutes per day to 252 minutes (nearly 4 hours). And a significant proportion is spent on watching mobile video. According to T-Mobile, 57% of its consumption is mobile video, and 80% of mobile video is on short-form consumption such as YouTube, TikTok, and Instagram.
Even though video is a core segment of mobile consumption, the mobile phone is ironically not tailored to consume video. Think about movie theaters. Since the creation of the motion picture, screens have become wider and wider. In contrast, mobile phones continue to become taller and taller so we can hold it in one hand. As a result, on streaming services like Disney+, you only can watch content horizontally on your phone. With YouTube, you can move between horizontal and vertical, but as you can see below, the vertical video only takes up about 1/3 of the screen.
Quibi recognized this void in high-quality vertical mobile video so its engineering team decided to create a new technology to optimize content for mobile viewing. They call it “Turnstyle technology” and it delivers a seamless video-viewing experience when shifting between horizontal and vertical video, as shown in this clip from CES 2019.
How do they do it? They shoot every piece of content with both a vertical and horizontal camera and keep both pieces of filmed content loaded in the background while one is playing. And it’s not just turnstyle technology. Quibi wants to use every functionality of a mobile phone to create content and deliver video experiences such as the interactivity of touch screen, camera, GPS, gyroscope, time of day, and movement. More on that later.
3. Star Power
Few streaming services in modern history have the star power of Quibi’s cast at launch. At the helm of Quibi are Jeffrey Katzenberg, former Disney chairman and Hollywood legend, and Meg Whitman, former CEO of HP and eBay. With Katzenberg’s creative vision and deep Hollywood network and Meg Whitman’s Silicon Valley product leaders and executive experience, they make a formidable duo at the top the startup.
Not only is the company run by Hollywood and Silicon Valley icons, but Quibi also has some of Hollywood’s most famous showrunners and actors creating and starring in their own shows. Academy Award winners such as Steven Spielberg, Peter Farrelly and Guillermo del Toro; directors like Antoine Fuqua, Lena Waithe, Sam Raimi and Catherine Hardwicke; and stars like Stephan James, Chrissy Tiegen, Laurence Fishburne, Lorne Michaels, Dwayne Johnson, Kris Jenner, Trevor Noah, Gabrielle Union, Rashida Jones, Kristen Bell, Dave Franco, Bill Murray, Christoph Waltz, Liam Hemsworth, Eva Longoria, Jennifer Lopez, Anna Kendrick, Usher, Mark Wahlberg, Reese Witherspoon, Chance the Rapper, Lebron James, Megan Rapinoe, Idris Elba, Sophie Turner, Joe Jonas, Demi Lovato, and Kevin Hart, to name a few dozen.
CONTENT
Quibi offers movie-quality 6–10 minute shows designed to be consumed on your phone, online or offline, with new episodes every day. It plans to release 7500 episodes of content by end of Year 1. Due to Katzenberg’s deep Hollywood ties, Quibi has convinced networks and studios from BBC to TMZ to ESPN to Disney to Universal to CW to CBS to develop a show on the platform. Katzenberg and Whitman have broken down their content into three groups.
Movies in Chapters (35 Shows); movies broken down into 6–10 minute segments like the chapters in a book.
Ex: Most Dangerous Game — — “Liam Hemsworth stars as Dodge Maynard, a terminally ill man desperate to care for his pregnant wife — enough so that he joins a potentially lucrative venture which turns out to be a deadly ruse pitting him as the prey in a dangerous game of cat-and-mouse”
Episodic, Unscripted, and Doc Series (120 shows); shorter “TV” shows for every type of person, whether food lovers, sneaker culture, racing, beauty, travel, etc
Ex: Elba vs. Block — — “Idris Elba ventures into the realm of stunt driving with this eight-episode series. Elba will compete with professional rally driver Ken Block in such car-based challenges as the Wall of Death, the Car Tightrope, and the Flaming Obstacle Course.”
Daily Essentials (new releases every day); 20 shows — — from the sports world, late night wrap-up, lifestyle trends, weather, talk shows, meditation, industry-specific news, etc
Ex: Last Night’s Late Night — — “a daily recap show highlighting the smartest monologues, best interviews, and must-see sketches from the previous evening’s slate of late-night shows.”
And like I mentioned before, Quibi wants to utilize the full capabilities of a mobile phone in creating content experiences, whether touchscreen, GPS, time, or movement. For example, Steven Spielberg is creating a 10–12 chapter horror movie than can only be watched when the sun goes down.
Here’s a full list of shows: https://ew.com/tv/2019/06/13/quibi-projects-jeffrey-katzenberg/
QUIBI AND GEN Z
So what does Quibi have to do with Gen Z? According to Katzenberg and Whitman, not much in their initial plans. Quibi’s target market is 18–44 year old Americans, with a specific emphasis on the 25–35 Millennial demographic.
Millennials are an obvious target market. They’re known as the cord cutting generation, have some disposable income in their late 20s and early 30s to spend on the streaming services, and spent 2.6 hours a day on mobile video in 2019.
However, in a world where Quibi succeeds and continues to operate over the next decade, Gen Z is also an interesting player in a startup’s future success, given that every member of the generation will be in their 20s by 2030 and active consumers in the streaming market. And whereas Millennial’s top apps include traditional social media apps such as Facebook and Instagram, Gen Z’s favorite apps are all mobile-video based: Snapchat, YouTube, and TikTok. Their mobile video watch time reflects this, averaging 3.6 hours daily, the most of any generation. While Millennials are mobile-video friendly, Gen Z are mobile-video natives.
Is there room for another mobile-video app in their day, let alone a paid one? Definitely not at this moment in time, with the oldest Gen Zers being no older than 23 and probably only having access to other streaming services through student discounts or the accounts of friends and family.
But what about in 5 years when Gen Z begins to have some disposable income? Based on Gen Z’s love for mobile video, I believe they would be even better consumers than Millennials for a platform like Quibi.
WILL IT FAIL OR NOT?
That’s assuming that Quibi will be around in five years. Jeffrey Katzenberg and Meg Whitman might have created the most ambitious short-form streaming service to date, but they are certainly not the first.
Verizon’s Go90, Samsung’s Milk, and a platform called Vessel were all failed forays into the short-form mobile streaming market over the past decade. All failed to ever attract consumer interest and shut down accordingly. However, Katzenberg is making the argument that Quibi can be the unicorn. How? High-quality content and technology-backed experiences. He points to the fact that Go90 was spending about $5000 per minute on content, while Quibi is spending nearly 100K per minute of content, and the robust technologies and platform Quibi plans on using.
For me, I really hope it works. It’s not necessarily filling a consumer need; how often do we dwell over the ten minutes we spent scrolling through social media at the Doctor’s office when we could have watched a chapter of a short-form show? But it does provide a new medium of storytelling with the power of technology and would inspire a new wave of creativity.
In my view, I don’t think it will end up working out, even though I am excited for the launch (I first heard about Quibi in Fall 2018). There are just so many questions. Quibi plans on generating revenue through the support of ads and subscription, with a $5 per month ad-support plan and an $8 per month ad-free plan. But why would someone pay $5 or $8 per month to fill in the “in-between” times in their day between 7am — 7pm? Will influencer-obsessed Millennials and Gen Z care that Hollywood’s big names are making content on the platform? Is there space for yet another subscription service in people’s entertainment library?
Nevertheless, there’s still a strong possibility that Quibi succeeds, largely because of two factors: the people at the top, and the funds behind the project. Everybody who is anybody in Hollywood is starring, creating, or financing a show on Quibi. Hollywood is basically in this project together. They might be too big to fail. Second, Jeffrey Katzenberg and Meg Whitman have some of the best pedigrees of any entertainment or technology executive in the world, including building successful brands such as Dreamworks SKG and eBay. You can’t bet against their knowledge and network and ability to build things.
Either way, I encourage you to see what’s next in the world of Hollywood, technological experience, and storytelling next week. Quibi is offering a free 90-day trial for all users, so jump on the opportunity during this time of social distancing if you have the means to!
This is part 6/12 of the “Find Gen Z Series”, a monthly blog where I detail one social or digital media platform and how to best reach Gen Z on the platform. I am no expert. All my knowledge and perspective is based on my own experience and extensive research. I just want to create an authentic and effective relationship between marketers and my generation. To learn about other platforms in the series, go to https://www.nealsivadas.com/findgenz and please reach out with any questions or feedback.
