Latest Quibi damage limitation exercise does anything but

The CEO of new video streaming service Quibi has turned to the press once more to address its faltering launch, but he continues to score own-goals.

Jeffrey Katzenberg has impeccable credentials as a video content exec, having founded DreamWorks and headed up Walt Disney Studio. He is the joint CEO of smartphone-focused streaming service Quibi alongside experienced tech CEO Meg Whitman and thus ultimately responsible for the success or failure of the venture, which has received billions in venture funding.

It would be fair to say that, right now, the numbers for Quibi are not what was hoped. Three weeks ago Katzenberg said the following in an interview: “Under the circumstances, launching a new business into the tsunami of a pandemic, we actually have had a very, very good launch.” Either that assessment was misleading, or Quibi’s fortunes took a dramatic turn for the worse since then, because he’s singing a very different tune now.

Speaking to the NYT, Katzenberg said: “I attribute everything that has gone wrong to coronavirus, everything. But we own it.” He seems to be trying to completely exonerate himself from any underperformance while at the same time claiming to do the opposite. Not a great start, regardless of how plausible the excuse is.

That wasn’t the last of the doublespeak. “If we knew on March 1, which is when we had to make the call, what we know today, you would say that is not a good idea,” said Katzenberg in response to a question about the timing of the launch. “The answer is, it’s regrettable. But we are making enough gold out of hay here that I don’t regret it.” It’s regrettable, but he doesn’t regret it, OK?

In response to the disappointing launch Katzenberg and co have been desperately trying to tweak the offering to broaden its appeal. They initially left out the ability to cast the content from your phone to your TV, apparently out of a desire to avoid diluting its smartphone specialness, but soon reversed that decision. Now the penny seems to have dropped that allowing some sharing of content online might help spread the word.

“There are a whole bunch of things we have now seen in the product that we thought we got mostly right,” said Katzenberg, “but now that there are hundreds of people on there using it, you go, ‘Uh-oh, we didn’t see that.’” Again, a perfectly normal part of refining a new product, but it’s hard to see how the previous ‘walled off’ approach was ever considered a great idea.

Part of the problem, on top of the pandemic, could be that Katzenberg is used to heading up operations that already have massive brand recognition and value. Disney can afford to limit the distribution of its content and over-charge for it because its unique and highly sought-after. The same it not true of Quibi, so acting all haughty and distant from the start would probably have been a bad idea no matter when it was launched.

As yet another exec leaves, Quibi may struggle to stay afloat in a perfect storm

Disruptive mobile video streaming platform Quibi seemed to have everything in place to succeed until the coronavirus pandemic came along.

The thinking behind the new SVoD service seemed sound enough: a lot of people watch video while they’re commuting or standing in a queue, so they need short clips optimised for consumption on small smartphone screens. When it launched ten days ago CEO Meg Whitman insisted that launching in the middle of a pandemic of biblical proportions wasn’t a problem, but the signs since then suggest otherwise.

Maybe Whitman thought the disappearance of commuting, especially on public transport, would be offset by the sudden need to queue to get into shops. But reports increasingly paint a different picture, of a lack of buzz and memes as commentators grow sceptical about mobile-first as a positive differentiator.

Adding fuel to that fire is the fact that Quibi has just lost its Head of Brand and Content Marketing, Megan Imbres, who is the fourth senior exec to leave the ship in the past year. “It feels like an opportune time of transition where I can take some time to identify my next challenge,” Imbres reportedly wrote in a note to staff, just a year after joining from Netflix.

Perhaps in an attempt to focus public attention away from that news, Quibi founder Jeffrey Katzenberg granted Reuters an exclusive interview in which he insisted “Under the circumstances, launching a new business into the tsunami of a pandemic, we actually have had a very, very good launch.”

Katzenberg conceded, however, that having his entire target audience confined to quarters was pretty far from ideal. A further indication that the launch may be somewhat short of very, very good is the announcement that Quibi is introducing the facility to cast onto TVs, which would appear to defeat the object of the service somewhat, and presumably wouldn’t have been introduced under normal circumstances.

For an expert view on the matter we spoke to Omdia Analyst Ed Barton, who focuses on the entertainment sector. We’re still looking for the big growth indicators,” said Barton. “The download numbers aren’t great and the immediate pivot to make the shows available on the big screen doesn’t reflect confidence in the mobile-first model.

“Their biggest challenge is they have yet to unearth a service defining hit on the scale of Breaking Bad or House of Cards, something that makes their service mandatory to the zeitgeist obsessed mainstream viewer.”

As ever, content is king, but Quibi may have been hoping to avoid the spending arms race being fought by Netflix, HBO, Amazon, etc thanks to its novel format. That hope now looks forlorn and if Quibi wants to stay afloat long enough to survive the perfect storm of its launch, it may have to massively increase its investment in unique programming.

Quibi positions itself as a complement to Netflix

With the streaming world becoming ever more congested, it’s not clear how many more services the industry can tolerate, but Quibi doesn’t think it has to worry about that.

Speaking on Squawk on the Street, Quibi CEO Meg Whitman boasted of an impressive start to the challenger content application, as well as talking up the role of a short-form video niche in the daily lives of mobile-orientated consumers.

“It didn’t hurt us at all,” Whitman said on launching during the coronavirus outbreak. “We had 1.7 million downloads in the first week, which exceeded our plans, our expectations, and the app is very popular. I have to say it is one of the most successful launches of a completely new brand and a completely new app.”

1.7 million downloads is of course impressive, but it will have to scale rapidly if it is to create a proposition to compete for attention with the likes of Netflix and Disney hogging the limelight. It certainly has the star cast to challenge, Steven Spielberg and Guillermo del Toro are two who will be creating content, but then again, the team does not directly compare itself with the status quo of content streaming.

The streaming world is of course becoming incredibly congested, and consumers wallets will only be able to tolerate a certain number of services. Internationally, there is still room for growth, but there are some markets where the segment might be at saturation point and companies are simply trading subscriptions much like telecoms providers are today. But Quibi might be able to avoid this cutthroat battle.

“There are lots and lots of streaming services which are long-form content made for the television set, but we think we are really different from that,” Whitman said. “I suspect the consumer will pick one or two, maybe three long-form OTT services, like the great brands out there. I think they’ll pick a music service for sure, and I think they’ll bit Quibi because they are three usecases, three different kinds of content, three time availabilities.

“If you have an hour and a half, you might want to sit back on your coach, watch TV with one of the great streaming services but it you are moving about your house or ultimately out and about, you’ll want to be on your mobile, so that’s the niche I think we fill. I don’t think people pick a music service and an OTT service, both fill a portion of their life, and I think we will be a third one in that group.”

While it is an interesting concept, and one which is certainly a possibility, it will be an uphill battle for Quibi. Fortunately for Whitman and the team, Netflix also faced an uphill battle in the early years before blossoming. It can be done as long as you have deep pockets, something which Quibi certainly does thanks to $1.75 billion in investments to date.

The issue which Quibi faces is it is trying to change the status quo, it is trying to introduce a new form of content to change viewing habits. This is immensely challenging, though a 90-day freebie introductory offer is one way to get eyeballs on the service. And with cash to burn, promotional offers can be continued through the coming months to get as many people on the service as possible.

This is where the coronavirus outbreak might work out as an advantage for Quibi. Not only are the consumers desperate for new content, but because movie sets are closed, more might be encouraged to try Quibi. And with the movie sets closed, there is less pressure on Quibi to spend on content which means more can be directed towards marketing and promotions.

The issue which Quibi faces will arise in three months’ time; has it validated the concept? Will consumers be convinced that short-form video can replace 30 minute episodes? Is the mobile experience good enough to challenge what Netflix offers?

It might have convinced 1.7 million people to download the app for a free trial, but the real test will come when Quibi asks the same users to pay for the service.

90-day free trial and an IP lawsuit; it’s all go at Quibi

Short-form video subscription service Quibi has had somewhat of a mixed week, announcing a 90-day free trial to pump subscriptions while also facing an IP lawsuit in California.

The cash rich content creator is on the verge of launching, though opinion is certainly divided on the concept. Some view this as an innovative way to engage digital natives who have incredibly short attention spans with original and unique content. It certainly is a novel idea, but it is very, very different from the status quo. And sometimes when you move the needle too aggressively away from the centre, the mass market is reluctant to shift from the comforts of the tried and tested.

This is the challenge which Quibi faces. It could either take the world by storm, introduce a new way of entertaining and engaging the consumer, or it could be a catastrophic failure. To give the concept as much opportunity to succeed, the Quibi business is offering 90-day free trials for users.

Launching on April 6, Quibi promises unique content in short-form, daily videos. More than 50 original titles will be available to consumers on launch, some of which come with conditions attached. For example, Steven Spielberg is creating a horror series which can only be watched at night. Bankrolled by $1.75 billion in investments, there certainly is the cheddar to fund some interesting ideas.

Quibi is certainly one of the rare examples of innovation today, though how much space is there in the consumers wallet for innovation?

The streaming world is currently dominated by Netflix, though it looks although Disney+ will at least leapfrog the chasing pack to offer some sort of challenge. Outside of these two, you have Amazon Prime, YouTube Premium and Apple TV+ operating worldwide, as well as regional providers such as HBO and Hulu in the US, BritBox in the UK, HBO Go in Asia and Hotstar in India. On top of these services, you have the traditional broadcasters such as Sky, Mediaset, Vivendi and Comcast.

This is a very congested and fragmented market, but somehow Quibi has to find some traction. The offer of free content for three months might be a useful means, it did seemingly work for Spotify, though whether this is a concept too far removed from the norm remains to be seen.

Elsewhere in the Quibi business, the legal team is getting an early workout.

Quibi has filed a counter-lawsuit in the US District Court for Central California to defend itself against a lawsuit from interactive video company Eko which suggests Quibi has violated one of its patents. The dispute concerns Quibi’s Turnstyle feature that understands the orientation of a viewer’s phone and adjusts the content accordingly.

Quibi has said that following its keynote address at CES this year, Eko ‘embarked on a campaign of threats and harassment to coerce money or a licensing deal’.

The lawsuit focuses on a meeting between Eko executives and Quibi founder Jeffrey Katzenberg. Katzenberg passed on investing in Eko, though two Snap employees who were demoed the Eko technology has since joined Quibi. Eko believes these two employees stole trade secrets. Quibi has argued the delivery of content to the app differs, therefore there is no patent infringement.

Even before this service has been launched, Quibi is certainly looking like a very interesting company.

Major mobile-only SVoD service Quibi set to launch in April

A subscription video on demand service designed solely for mobile consumption will launch with the backing of much of the entertainment establishment.

Quibi is an abbreviation of ‘quick bites’ and is headed up by Silicon Valley veteran Meg Whitman and Hollywood aristocrat Jeffrey Katzenberg. This combination is being offered as evidence that the new service will deliver an ideal combination of entertainment and technology. We first encountered Quibi last year, but it used a CES keynote to ramp up the hype ahead of a 6 April launch.

The unique selling point is that all the content it offers will be specially created to be consumed on a mobile phone. This means not only special framing but clips ranging from four to ten minutes in length. The big new feature Quibi execs banged on about in the keynote was the ability to auto-rotate the content between portrait and landscape mode. In most cases this seems to just mean the portrait view is just a cropped and zoomed version of landscape, but there’s also the potential to offer unique perspectives depending on the alignment.

That last feature is novel but could easily become an annoying gimmick if used clumsily. So could a Steven Spielberg series called after dark, which you can only watch at night. What if you want to watch it during the day? Quibi needs to be careful that, in it’s desire to differentiate itself in the highly competitive SVoD market, it doesn’t get carried away with cute but irritating features.

On that note we spoke to Ovum’s Chief Analyst for entertainment Ed Barton, to get his take on the imminent launch. “Quibi’s innovations are revolutionary and it must, arguably, inspire a revolution in viewing habits to succeed,” he said. “Mobile-first viewing services have not enjoyed a particularly illustrious track record and already huge volumes of mobile video consumption are driven by YouTube, messaging and social apps, and Quibi is betting that there is space for a premium player. It is a bold bet especially when competition is more intense than ever before.”

Barton’s cautious assessment is reflected in Ovum’s initial forecast for emerging global direct to consumer video platforms, which you can see below. It should also be noted that Ovum still only sees these new platforms accounting for 29% of the total US (where most of them are expected to have the most traction) SVoD market by 2024.

Quibi does have a lot going for it, not least the apparent backing of the entire mainstream media and entertainment establishment. On top of that T-Mobile US will be offering it to its punters from launch and Google seems to have a major role too. It has promised three hours of fresh, original content per day and is asking for $5 with ads and $8 without ads for access. The pitch is that Quibi is premium video for millennials, which makes its partnership with Google especially intriguing as that puts it in direct competition with YouTube.

Quibi: a short-form streaming service to keep an eye-on

A passing reference at IBC 2019 was the first we had heard of Quibi, but it certainly looks like an interesting proposition which could add further disruption to the content world.

Imagine a cross-over between Netflix and Snapchat and you’ll have something close to Quibi. Although there isn’t a huge amount of information out there about the business, it looks to be a mobile-based, short-form video subscription service designed for millennials. Content will be designed for mobile-format, and only viewable through the app.

This might sound like a bit of a fad but looking at the content it already has lined-up, the first-step towards success has been made.

Firstly, you have a yet to be named thriller starring Oscar winner Christoph Waltz alongside Liam Hemsworth, where a terminally-ill man is hunted by contestants, as he attempts to provide long-term for his wife. Secondly, you have a Stephen King horror series which can only be watched at night. Another title is “Action Scene” which stars Kevin Hart.

These are only a few of the titles which Quibi has floated through the press. Despite there not being a huge publicity push for the service, Hollywood stars seem to be convinced by the concept.

Although it was only a passing comment on-stage at IBC 2019, All3Media CEO Jane Turton and UK MD of Production for BBC Studios Lisa Opie also suggested they had both been commissioned for content on the platform. Turton also said her parent company Liberty Global was an investor in the business.

Interesting enough, the Quibi business seems to have attracted interest from some of the worlds’ most recognisable technology businesses without making a significant splash in the publicity pond. Walt Disney Company, 21st Century Fox, NBCUniversal, Sony Pictures Entertainment, WarnerMedia, and the Alibaba Group complete the list.

Once again, we are relying on third-party sources, but it does seem to be priced reasonably fairly. For $5 a month, or $8 for an ad-free service, the platform might well gain some traction should the content live-up to the expectation.

Another interesting aspect of this business is the leadership team. Jeffrey Katzenberg, a vastly experienced executive in the firm industry with tenures at Paramount and DreamWorks, has been brought on-board to work alongside CEO Meg Whitman. If Whitman sounds like a familiar name, she was previously CEO of Hewlett Packard, leading the business through the restructuring period which created HP Inc and Hewlett Packard Enterprise.

While Whitman’s tenure at HP was not exactly the most successful, her background in the technology industry married to Katzenberg’s experience in the content world dovetails quite well. It’s technology pragmatism alongside content creativity; both barrels will have to be firing if the Quibi business is going to be a success.

This is the other side of the business which the team is yet to discuss; technology. Digital natives are not very tolerable of poor service, so Quibi will have to be on-form if it is going to be a long-term success. Creating a new, disruptive service is difficult, just look at YouTube’s experience last year.

As Paolo Pescatore of PP Foresight pointed out to us, streaming the Champions League Final on YouTube was not the greatest of successes. It was an interesting move, setting the scene for potentially a new field for YouTube, but the team did not necessarily nail the experience.

“YouTube had decoding issues dealing with the huge demand from the live streaming event. There were no problems with the stream to the BT Sport app,” said Pescatore.

“Key to the success of Quibi will be distribution as it has a strong growing slate of content. It should strong consider forging tie ups with telcos who are crying out for great content to drive connections and usage on fibre broadband and 5G networks.”

We like the idea. It is a novel-concept which could potentially form a completely new kind of content delivery model. The audience is likely to be curious as well.

If the last few years have shown us anything, it’s that the millennials and generation Z are open to new ideas. And they are willing to pay for it. $5 a month is a price point which many will tolerate as an experiment.

Assuming the content lives up to the blockbuster names it is attracting, the technology fulfils the experience which digital natives demand, and the marketing team is clever enough to cut through the noise in a very crowded space, this could well be a success.

Quibi isn’t exactly shouting about itself at the moment, but it is an idea which we really like the look of.