Quibi’s Rise And Immediate Fall In The Steaming Industry

Co-founder Jeffrey Katzenberg knew that Quibi was either going to be a home run or massive swing and a miss.

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Jeffrey Katzenberg and Meg Whitman were the two billionaires that launched Quibi, an experimental new entertainment streaming service that was meant to offer celebrity-filled fragmented “quick bite” shows; hence the name Quibi. Every episode on the app is 10 minutes or less and includes programming like a Joe Jonas hosted talk show, a documentary on Lebron James’s ‘I Promise’ school, Chrissy Teagan working as a judge, and more. 

The app launched in April after nearly $1.75 billion had been invested into the app’s creation/content. Many were skeptical as to whether or not this new mode of streaming would catch on. On paper, we know that among the younger generation especially, attention spans are only getting shorter, as exemplified by social media apps such as Tik Tok and YouTube’s popularity, so Quibi was meant to take full advantage of that. 

From the start, the business struggled, according to Katzenberg. Upon its launch Quibi barely made it into the top 50 most downloaded apps for the week, and initially only attracted 1.5 million active users by the end of May; its second month on the market. For comparison, Disney Plus launched in December 2019 and currently has over 50 million active subscribers. Netflix, which is one of the original streaming services to launch in America, has a whopping 183 million global users. Quibi is currently only available in the US and Canada. Michael Goodman is a media analyst who recently spoke with the media about the “rise and fall” of the app.

“Quibi was either going to be a huge home run or a massive swing and a miss. With the pandemic and the ending of its 90-day free trial leaving the app with millions of fewer subscribers than anticipated, the scales seemed decidedly tipped toward swing and miss.”

A Quibi subscription is $4.99 a month with advertisements and $7.99 without advertisements. The company initially projected to have 7.4 million subscribers by the end of 2020, but based on the current data they’re predicted to end the year with 2 million subscribers.

The drop off in users after the initial 90-day free trial hit Katzenberg and the entire company hard. Quibi was originally on track to have spent $1 billion by the end of the third quarter of 2020. It was able to earn $750 million in the beginning of this year, however, the company would need to make an additional $200 million of new funding by the end of 2021 if they want to survive the massively competitive streaming market.  

Media reports also claim that Katzenberg and Whitman have a very futile working relationship. Megan Imbres, the head of brand marketing, Janice Min, head of daily content, and Tim Connolley, head of partnerships/advertising, have all quit working unter Katzenberg and Whitman within the past year. That’s three major executive heads that departed from Quibi as they were enduring their struggle of a launch. 

A majority of the discrepancies have to do with an uneven distribution of payment; staffers reported being infuriated by Reese Witherspoon’s $6 million salary for voice-over work on six-minute episodes of a nature series on the app, especially considering Witherspoon’s husband is the head of talent and content acquisition for the company. Daniel D’Addario recently discussed the app for Variety Magazine, and explained that Katzenberg’s blaming of the apps failure on the pandemic as “fallacious.” 

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“The content’s blanket strategy of celebrity – Witherspoon narrating a spot about cheetah female empowerment on Fierce Queens, Chrissy Teigen as Judge Judy in relationship court – was uniquely poorly suited to this moment but the format would have always been a disaster.”

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Quibi marketed itself as a trailblazer for the quick-moving 15 minutes or less entertainment it delivered, however, the reality is other popular streaming services, such as Netflix, already have content that is just as short. For example Netflix originals such as Special, Bonding, and I Think You Should Leave, all deliver episodes that are less than 20 minutes. YouTube is also one of the largest social media/entertainment platforms out there currently and all of those videos are quick and free to access. 

 “Five years from now, we want to come back on this stage and if we were successful, there will have been the era of movies, the era of television and the era of Quibi. What Google is to search, Quibi will be to short-form video,” Katzenberg told a crowd at South by Southwest in 2019. Audiences, however, received Quibi and it’s content as more of a “rushed” and “forced” type of streaming service. Commercials began advertising Quibi relatively close to it’s launch, leading individuals at home to be confused as to what the app was actually about; is it just a bunch of celebrity reality shows? There’s movies too? Why pay for a new service when I can watch quick content for free on Tik Tok or YouTube?

Critics also blame Quibi’s initial failures on the fact that it’s only available on a mobile device. This makes it so users can’t watch their shows on a bigger screen unless they have phone-to-TV mirroring technology, but even then, users won’t be able to access other parts of their phone while they watch. 

So will Quibi die before it even has a chance to hit the mainstream market? That depends, according to Goodman, who claims that Quibi is “learning that the decisions that they expected to hang their hat on are not the things that consumers want.” The company has already claimed that it would be moving away from the “mobile-only” format and will likely launch an app to be downloaded for smart TV services like Amazon’s Fire Stick or Roku. 

The company has also insinuated that it would be moving away from exclusively making content that’s 10-15 minutes in length. However, this could also pose a major risk based on the extreme popularity of the dozens of other streaming services currently on the market. For now, only time will tell if Quibi will be able to survive the competitive digital entertainment industry.