That smartphone usage is growing is a fact; that we want to stream 10-minute episodes anytime anywhere is a hypothesis. Quibi, a Hollywood-based streaming company, wants to prove the hypothesis is true.
With high-quality content and a hefty budget, Quibi aims to produce 10-minute episodes of film and shows for smartphones. The idea sounds very logical. More and more viewers use their 10-minute breaks to read the news on their phones, watch shows on the commute, and use every spare minute on social media or online entertainment. However, an hour-long episode or a three-hour-long movie are not products made for those short escapades. Quibi’s content is.
In 2018, film creator Jeffrey Katzenberg, co-founder of DreamWorks Animation, and former eBay CEO Meg Whitman partnered up to create a new genre of storytelling. They started to plan Quibi. The company will not only create shorter versions of film-narratives, but it will also provide alternative content, like documentaries and news. The company, set to launch in April 2020, has already raised $1 billion in funding from a variety of investors. Entertainment companies like Disney and Viacom are among them. It has also attracted great talent among the executive team and board with hires from Warner Bros and Conde Nast.
The amount of cash, the excellent and knowledgeable team, and the exciting format are also backed up by data. According to eMarketer, the average time a consumer spends watching videos on a mobile device in a given day has gone up to almost 70 minutes, from six minutes in 2012. We love our phones, we use them regularly, and we are not going to abandon them (read Mobile consumption is up… way up.) Seventy minutes is a whole “Mad Men” episode, but it is also the time it takes for you to do the laundry. And who has the time to watch an episode without stopping? It’s better to watch seven 10-minute episodes while doing house chores, eating, cleaning, or at any other moment of the day. That’s where Quibi comes in.
Still, there’s a catch. Quibi’s revenue model is a mix of advertising dollars and subscription fees. For $8 a month, the user can watch unlimited videos without ads; but for $5 a month, the viewer will get the ads. In this sense, it’s similar to Hulu (almost $6 with ads, nearly $12 without ads.) The customer pays with its time by consuming commercials. The catch is not the price of the service. Actually, for high-quality content through a mobile device app, the price is quite reasonable given the current subscription fees streaming services charge. Netflix’s basic plan costs $9, HBO’s $15, and Amazon Prime’s $13 per month. $5-8 sounds like a good deal.
However, platforms that provide short videos (videos that users watch on those breaks or commutes) do not charge for content. Viewers watch those 10-minute videos for free on social media like Instagram or video platforms like YouTube. In this overcrowded online streaming market, it is hard to see why consumers would want to pay more when many already pay for Netflix. The only reason that comes to mind is excellent content, and that’s what Quibi is aiming to do. But the bets are high—to produce high-quality content, Quibi will need to keep investing in talent. One thing is sure—it’s going to be very expensive.
For now, Quibi is not afraid of paying. As reported by the Los Angeles Times, the company offers premium prices for content and has announced it will produce more than 7,000 shows/movies/news pieces in 2020. Quibi is working with directors Guillermo del Toro, Antoine Fuqua, and Sam Raimi. This will ensure a certain number of subscribers and the competition with the soon-to-be-launched Apple TV Plus. Moreover, Quibi will release remakes. For example, the company is working on a new spin of rom-com “How to Lose a Guy in 10 Days.” The roster sounds promising. Another exciting aspect of Quibi is that the service will be able to play with the user through the phone. As we spend 24 hours with mobile devices, certain shows could be available only at certain days or hours, providing an immersive experience with a particular show.
If Quibi succeeds and users start subscribing, the potential of the app is enormous. Quibi could redefine online streaming content, fill all our time that’s spent ‘doing nothing,’ and create a new genre of short-storytelling. But for that, it first needs to fight off the other streaming players. With Apple TV Plus now in the game (read Apple TV Plus is here to fight for prestige) and Disney+ about to be launched (read Disney could very soon become the king of online streaming content), Quibi could be quashed before it reaches puberty. To succeed, Quibi is going to need an aggressive push to enter the market. On the one hand, Quibi is not backed by a famous company (like Disney and Apple) and is entirely new (unlike Netflix), so it needs more marketing than any of them. On the other, its model could be replicable, so Quibi needs to hook users and make them loyal before other streaming platforms copy its model and start producing shorter pieces for smartphone users.
Quibi sounds impressive—it responds to a space in the market, viewers consume this type of content, and it’s cheap. But first, it must survive this cutthroat market, and for that, its initial waves must make noise.
Watch Quibi founder Jeffrey Katzenberg talking about the company on NBC News: