Off Air: Quibi
Check out this article: Quibi Exploring Strategic Options
Mike Butler, co-founder of Forgotten Entertainment and co-host of Forgotten Cinema, Crackin’ One Open, and 2 Player Bros. joins us this week to discuss the news that Jeffrey Katzenberg’s Quibi is exploring strategic alternatives.
I honestly can’t say I’m surprised to read this. Jeffrey Katzenberg’s (former chairman of Disney and co-founder of Dreamwork’s) over-the-top app had a lot of press for the past two years leading up to the launch and then launch really kind of floundered.
Katzenberg and team spent over $1B on original content including four dozen original series. That’s a lot. Yes, he had big names attached to the projects including Jennifer Lopez, Kevin Hart, Kristin Bell, LeBron James, (his Dreamworks co-founder) Steven Spielberg, Nick Jonas, and Sophie Turner, but that’s still a ton of money.
Following a successful launch week of 1.3M downloads, the app failed to catch on with viewers. By May, it was said there was only 3.5M downloads and only one-third of that had active users.
Katzenberg blames the coronavirus for the lack of uptake. What do you guys think? Was it the coronavirus that led to the poor launch? Was it the subscription fee ($4.99/mo with ads or $7.99/mo w/o ads) that contributed to its failure to connect? Or something else?
And what do you think this means for the future of short-form video content?
Shocked! I can’t believe Quibi failed!? It was such a sure thing! Can you feel the sarcasm through my words? I want to be nice here, because this idea and the genesis behind it seemed so obtuse and stubborn that I truly can’t believe someone as smart as Katzenberg would believe this was a sure thing. Seriously?!
“...pioneered a new form of storytelling.” ARE YOU KIDDING ME?! What was myself and hundreds of others doing ten years ago when we were making web series for the digital space? You know, short form content. So you come late to the game and now you’re a pioneer?
But to answer your question, Pat. No. Don’t blame the pandemic. If your idea was good enough, the pandemic would’ve aided in its success, not hinder it. The only thing the pandemic did for Quibi was reveal its outdated idea and reinforced three things we already knew.
While your content may be on the mobile device, it will always be compared to what people see on their TVs and in the cinema.
People are not going to pay for a mobile subscription service when they can get mobile content for free on YouTube.
Limiting yourself to a mobile-only content service puts you in direct competition with not only other mobile video platforms, but also app-based games and they don’t usually require monthly subscriptions.
I’m surprised it took this long, honestly. Maybe not for them to go belly up and look to sell, but changing their strategy. If anything COVID would have helped them because they were really the only thing putting out new content at that time. The mobile only approach was a terrible way to go from the start. No one is going to watch something solely on their phones...that is to say, no one in the demographic that they seemed to be pulling for; no one who was going to shell out $4.99 or $7.99 a month. The “phones only crowd” are in high school. They cannot afford monthly subscriptions nor do they care about episodic storytelling.
Field is right that the market that Quibi was hoping for get their YouTube series for free. And the shows they watch aren’t story driven narratives. It’s PewDiePie, it's Markiplier, or The SloMo guys, or nowadays anything on TikTok. The 15-21 year old audience that is “phones only” really never gave a crap about the return of Reno 911 or the name Spielberg.
I care about those things; we care about those things, but people in our still key demographic who have that “disposable income” (I don’t really, but I like to pretend) are still going to watch on their television sets. We are going to wait for it to end up on Roku, Xbox, PlayStation, or smartTV. But we are also the binge generation. Could five minute chunks of Officer Dangle and crew keep me satisfied? Maybe, if you made fifty episodes a pop and then give me a ton of other interesting content when I’m done. And though they had some big names, their content never wow’ed me or even reviewers. I was most interested in a decade old show. Also out of all those big names I really don’t think the mobile generation cares about too many of them other than Nick Jonas, and even then…
Quibi was a gamble to try to “Make Web Series Great Again,” but you cannot charge for something that I can finish before I’m done getting my coffee at the drive-thru. Maybe if Quibi was free and only ran ads it may have had a chance, but I doubt even then. Maybe as a studio of sorts that made YouTube content and profited off their ad stream already. Even YouTube Red (YouTube Premium) was a failure. And if YouTube can’t beat YouTube what made Quibi think it could?
You both hit on something very important here and that’s the cost. With Netflix they lured us in with known quantities in the form of shows and movies we wanted to see again and again or shows we had never gotten around to trying. Then they hit us with the original content. And it worked. With YouTube Red/Premium, essentially anything you wanted to watch was on the free version except the unproven original shows. Who’s going to buy the into that?
These strategic alternatives don’t mean the end of Quibi. There’s three options, though two get to the same point:
IPO or SPAC - both options are hot at the moment. The market is flooded with either though they’re mostly in the tech and life sciences spaces. The Quibi offering would certainly make waves. Either option gets them more cash to play with to fund new shows or increase marketing at the cost of additional shareholders or a new management team.
Sell the company. This would’ve seemed a lot more likely pre-launch. What are you buying? Certainly not the mediocre user list. What, the IP and connections to creators? At a multiple of $1-2B, that seems a hard sell.
So, I ask you both, if you became a Quibi, shareholder in what direction would you like to see the company take?
Well, now I’ve got access to all this well-produced content, albeit bite-sized portions, but could be some re-usable IPs. If I’m a shareholder who has influence, I’m looking at two options.
Developing the content into longer-form stories (television, streaming, features)
Selling my library of content and the IP rights either piecemeal or as a whole.
Granted, I may not own the rights to all of this content, so I’d have to check with that. But, I’m not doubling-down in the short-form content market. I’m getting out of it.
I agree with Field. Take a few of your best shows, edit the first seasons into pilot episodes (I assume each show has thirty minutes to an hour of content) and pitch them to the larger streaming services OR as a pitch video to get money to make it a feature, which post COVID would also probably go to streaming.
If they went free to stream and added themselves to the TV space (Roku, gaming systems, PC) I might also hold out a little bit of hope for them and hold my position. Even if they went free to stream, like you already brought up Pat, their user base is mediocre at best right now. They’d need a large influx of new users by going free-to-stream in order to get advertisers interested.
But let’s be honest; that’s not going to happen. They’ll believe in this business model and run it to the ground. HULU, Netflix, Disney+, HBO MAX, Paramount+, YouTube, the list goes on and on. If pay to play short form content was worthwhile, they’d all be doing it and YouTube wouldn’t have given up on it.
I hear what you both are saying. It wasn’t the content that failed the company but rather the launch and the incorrect assumption that people would pay for the bite-sized chunks of it.
I am concerned that this will reflect badly on short-form content going forward but I think the takeaway from that is short-form video content should be used in conjunction with the full portfolio of content. Pair a short-form video show that’s in the same universe as your hit traditional length show along with a recap podcast. There’s a lot of options available but it needs to be done with purpose and without the assumption consumers are going to pay for the smallest piece of it.
There’s still a lot of story to be written on Quibi and I think we’re all excited to see where it goes. Thanks for joining Mike!
Michael Field is a filmmaker and storyteller. You can check out his podcasts here at Forgotten Entertainment, but also check out his personal website as well. Pat Whalen is the star of Yet Another MCU Podcast and the behind the scenes straw that stirs the drink at Forgotten Entertainment. Michael Butler is the co-host of multiple podcasts including Two Player Bros and Crackin' One Open.