Quibi is Jeffrey Katzenberg’s closely-watched premium video service that launches April 2020 and hopes to succeed where others – most notably Verizon with its since-shuttered go90 service – have failed. That is, in the world of subscription-driven, millennial-focused and mobile-first premium video. Quibi essentially aims to become the Netflix of video for our smallest screens. Think Stranger Things or The Crown, but in bite-sized "snackable" episodes of not more than 10 minutes each. The Quibi name itself – short for “QUIck BItes” – screams its vision.
Will Quibi succeed?
Skepticism certainly runs deep in the ranks of media-tech. So, it's a good time to understand the case "for" and "against" Quibi. Let’s take the “for” case first.
Quibi boasts an audacious vision that neither Verizon, nor any other service before it, ever even attempted to pursue. Quibi will feature content with Hollywood-style production qualities, talent and overall DNA – which means traditional Hollywood budgets that reach up to $125,000 per minute of video (yes, per minute). Katzenberg's fundamental premise is that this kind of expensive -- very expensive -- high end storytelling is the "special sauce" that will draw in young audiences and tap into a lucrative mobile-first market that was always there -- but was just never served. That's why Quibi believers feel that comparisons to services like go90 aren’t exactly “apples to apples.”
Quibi, accordingly, will operate in a green field when it launches. It boldly goes where no other player has gone before – and hopes to stake its claim to become the subscription video on demand (SVOD) destination for premium mobile-first content well before Netflix, Amazon, Apple, Disney and other SVOD behemoths of present or future set their sites on mobile. None of those giants have yet prioritized (nor plan to prioritize) mobile-first video in any meaningful way, anytime soon. Quibi is the first-mover.
Quibi, of course, also comes from the mind and brand of Katzenberg, a Hollywood legend and innovator who has brashly succeeded where others have failed before. So, the "X factor" quotient is high here. Katzenberg, of course, first built (and sold) his own major studio, DreamWorks. Then, as the rest of the traditional studio world looked right, Katzenberg looked left toward tech-driven content innovation and acquired digital-first studio AwesomenessTV early-on (and sold it for a significant multiple a few years later). Katzenberg is the rare mogul who has played successfully both in the old "traditional" and new tech-driven worlds of media and entertainment. His relationships with highly-pedigreed creators run deep, and he can call in a lot of favors (not to mention a lot of dollars) to drive content success. Not to mention the major brands and advertisers who will support that content. As of June, Quibi claims to have already booked over $100 million in advertising commitments, a number that represents two-thirds of its first-year $150 million ad inventory. And, the "K factor" likely will attract mega-initial distribution from telcos out the gates, first domestically. Impressive.
Katzenberg also understands that Hollywood content alone will not a successful mobile service make. That's why he brought in Meg Whitman to be the Silicon Valley technical “ying” to his Hollywood “yang.” Quibi should boast strong tech platform chops when it launches, in addition to high quality content unavailable anywhere else. One immediate differentiator will be that all videos on Quibi will be available both in traditional horizontal orientation and Snap-esque vertical orientation, with the ability to seamlessly toggle from one to the other.
On the flip-side of the Quibi debate, skeptics point to many of the same factors, but spin them 180-degrees.
First, non-converts simply don’t believe that mobile-driven economics can support Katzenberg’s Quibi vision. They point not only to Verizon’s go90, but also to mobile-driven services like Comcast’s “Watchable” and previous video darling Vessel – both discarded long ago after much initial pomp and circumstance. And, Katzenberg’s content budgets tower over those of the predecessors by an order of magnitude. If they failed spending far less, how can Quibi succeed? Will millennials really pay $4.99 per month for Quibi with ads and $7.99 without (especially when so much free mobile-first content is already available to them and they can access Netflix premium content on their phones if they want).
Quibi skeptics also simply don’t buy the service’s fundamental premise – that more traditional Hollywood-style programming featuring Hollywood-style talent and production values will effectively translate to a mobile, millennial-driven audience. Do millennials care about A-list "brands" like Academy Award-winning Directors Guillermo Del Toro (“The Shape of Water”) and Peter Farrelly (“Green Book”) signing on to create exclusive premium content for the service? Will that kind of traditional Hollywood name-dropping matter? Or do millennials care most about individual content titles and brands themselves? Remember, Quibi's content will be original. The service brings no tent-pole millennial-friendly brands like Marvel -- with built-in mass audiences -- to the Quibi universe. That means that Quibi instead will need to build its audience one-by-one. Yes, Quibi likely will sport major distribution partners at launch. But, immediate mass distribution certainly didn't do the trick for Verizon. So much competition for those young eyeballs already exists.
Of course, no one can say either way at this point whether Hollywood-style content and overall Katzenberg-ian storytelling will work on a mobile platform with fundamentally different mobile economics and audiences? It is one great experiment. Quibi executives acknowledge as much.
So, why not enjoy the ride? Why bet against Katzenberg and Quibi?
And, not many openly do. After all, the overall video ecosystem -- particularly artists and creators -- benefits no matter what happens. That’s why every single major Hollywood studio is a Quibi investor and potential content partner. These studios helped Katzenberg raise over $1 billion to fund his grand vision and, if nothing else, see Quibi as being a hedge. It’s like that scene in “The Godfather Part III” when Cardinal Lamberto asks a skeptical Michael Corleone at the Vatican whether he “believes.” In the Cardinal's words -- appealing to Corleone's practical side -- “What have you got to lose?”
Those on board the Quibi train certainly don't see much.
