What Went Wrong For Quibi: The Post-Mortems
Over the past couple of weeks, much has been made of how on earth Quibi, the short-form video platform, burned through more than $1billion only to collapse six months later.
Back in early April this year (somehow both 6 months and also something like a decade ago), Quibi, flush with a staggering $1.75billion in funding, lurched launched into existence.
The service offered a multitude of celebrity-fronted shows segmented into “quick bites” (hence, “qui-bi”) of 10 minutes or less. It had a plethora of A-listers either creating or appearing in shows, as well as major advertising partners such as Pepsi, Taco Bell, Anheuser-Busch and WalMart, and investors with enviably deep pockets such as Google, JP Morgan, Goldman Sachs, Alibaba, and Future Fund (an Australian sovereign wealth fund).
In short, Quibi appeared to have lots going for it and, as such, expected great things.
Alas, following its launch, Quibi was hit by a string of disappointing news - within a week of its launch, it fell out of the top 50 most downloaded apps and only attracted about 1.5 million active users by the end of May, according to the Wall Street Journal – a dismal showing compared to over 50 million subscribers drawn to Disney+, which had launched a few months earlier.
So, what went wrong for Quibi?
The streaming service, designed to deliver quick bites of video content to commuting subscribers, did not plan on the pandemic. But coronavirus was not its only problem. Indeed, take a scroll through Twitter and there are any number of “I told you so”’s assigning blame hither and thither.
Back in 2018, a Harvard Business Review article detailed how Quibi (called ‘NewTV’ at the time) was a $1.75billion bet based on a set of hypotheses such as whether consumers would want to watch short-form mobile entertainment, whether production companies would produce something for Quibi that people would watch, and whether telcos such as Verizon would distribute the content. But Quibi, the article explained, ‘doesn’t plan on testing these hypotheses. With fewer than 10 employees but almost $2billion dollars in the bank, it plans on jumping right in.’
Ah.
Fast forward to the present day and for AdWeek there were several glaring issues for Quibi such as its lack of compelling content, the inability to share Quibi content to other social platforms (‘restricting sharing is antithetical to what makes social media ‘social’’), and, unlike other streaming services, Quibi had no place for people to discuss episodes, curate their favorite clips or share them with one another. In other words, there was very little chatter about Quibi and its shows, and therefore no word-of-mouth promo to get people interested and invested in the service.
In The Drum, Tom Jarvis of the Wilderness Agency agreed that the inability to share videos to other platforms hampered ‘any chance for content to spread virally. There was a huge lack of social functionality within the app.’ But there was also an algorithm issue - in that it didn’t seem to do a good job of learning what the user might like or want to watch - and an issue of relative value: ‘Watching a cat video on YouTube, or the Ocean Spray video on TikTok, is as valuable and meaningful to many people’ as high-budget Hollywood content. Quibi only had the latter and, even though we’re watching more short-form content than ever, it ‘tried to sit apart from how we consume entertainment today and force people to consume the way they wanted.’
From the perspective of entertainment marketing expert Gene Del Vecchio, the issue was that “No one knew what Quibi was, which was a problem, and it didn’t have the killer content, which you need, particularly when you’re late to the party,” he explained to the LA Times. To emphasise that, the LA Times article goes on to say that Quibi ‘conducted market research that came back saying that a substantial number of respondents thought “Quibi” was the name of a food delivery service.’ (Though Quibi has denied that characterisation, calling it inaccurate.)
In Entrepreneur, Brendan Gahan thinks the ‘reason for this utter mess is that Quibi ignored their target customer. They didn’t take the time to invest in, and learn, what 18-34-year-olds care about. That’s why they went with traditional stars instead of digital stars.’
As Gahan says, ‘it doesn’t matter if you’ve got billions of dollars. [...] You cannot spend your way out of a fundamental mistake. This is marketing 101. Know your consumer.’ Quibi had the money, the leadership, the market conditions (with paid subscriptions for streaming-video services at all-time highs) and, actually, coronavirus should have helped them given that due to quarantine screen time has increased dramatically.
“The world has changed dramatically since Quibi launched and our standalone business model is no longer viable.”
Over on Tubefilter, David Bloom thinks Quibi might have actually had too much money to play with. ‘It’s just possible,’ he says, ‘that Quibi raised too much, rather than not enough, money to become successful. [...] Time spent fundraising and managing investors is time not spent dealing with other crucial challenges, like making your shows distinctive, or creating the best possible user experience.’
Before it met its end, Quibi did manage to get a lot of shows onto the service and, as The Guardian notes, it had ‘an awful lot of serious, big-name, A-list talent either behind or at the front of it, such as Jennifer Lopez, Idris Elba, Steven Spielberg, Will Smith and Chrissy Teigen.’ However, a few months after launch, it sounded ‘like more celebrities were involved than punters.’
Still, The Guardian does allow that coronavirus had a significant role to play in dooming Quibi. ‘The idea of “premium” mini-shows made sense,’ it says, ‘if they were aimed at people on the move, who wanted to catch up on something between train stations, perhaps, or on the bus home from work. [...] In the 2020 that Quibi ended up launching into, the rise of working from home means that the transitional state it would have filled has disappeared for many.’
Jeffrey Katzenberg, Quibi’s founder, would perhaps agree with that as, according to The Information, he appeared to blame the pandemic for Quibi's failure. "The world has changed dramatically since Quibi launched and our standalone business model is no longer viable," he’s quoted as saying.
Company executives also ‘blamed some of Quibi’s problems on timing—both the pandemic, which made marketing harder, and the Black Lives Matter protests that dominated the news cycle over much of the summer. Quibi decided to suspend releasing or marketing new shows during the protests, said one of the people familiar with the situation.’
With only between 400,000 and 500,000 subscribers towards the end, The Information reported, Quibi was well short of its target of getting 7.4 million subscribers by the end of the year.
Ultimately though, The Information thinks Quibi’s founders fell into the trap of believing that you win by going big. ‘Actually, it’s exactly the opposite. [...] Quibi failed because its founders were particularly primed to fall into the “think big” trap. Katzenberg and Quibi’s CEO, former eBay and HP CEO Meg Whitman, are big-picture thinkers with access to tremendous amounts of capital to fuel their ideas. And so they built a service that needed to reach millions of users from the get-go. [But] they missed a key point about how to scale a media startup. You don’t get big fast. You get big by finding a unique leverage point—and then another one.’