In the seemingly endless attempt by entrepreneurs and major conglomerates to cash in on content streaming, Quibi is a new streaming service aiming to cater to our ever-shorter attention spans. The service focuses on short-form content that packs the punch of big-name stars.
A Short History of Quibi
According to Craft.com, Quibi is based in Los Angeles. The service was founded by Jeffrey Katzenberg. A film producer with an extensive background, to say the least, Katzenberg was chairman of Walt Disney Studios for a decade. He is credited with being at a crucial point for Disney (DIS) - Get Report and produced childhood favorites like "The Lion King" and "Aladdin." Katzenberg might not be a household name, but he’s been a part of many successful films. He was later one of the founders of Dreamworks animation, leading to big titles like "Shrek."
Quibi is his gambit in a new direction. It’s a big one too, considering the company has raised nearly $1.75 billion in financing. The service launched days ago, so there isn’t entirely a ton of information to go on at this point. The business is really banking on the belief that consumers are willing to watch large quantities of short-form content on their mobile devices.
The power of executives behind Quibi does bring in one key ingredient: stars. Names like Kristen Bell, Jennifer Lopez, Liam Hemsworth, Christoff Waltz are all making appearances in Quibi programming. CBS executives like Becky Brooks have joined the ranks. There is certainly the initial spark here. The question is whether it can lead to a profitable long-term entity.
The types of content that you'll find on Quibi seem to range from short-form action series that verge on mini action films, all to the way to satire such as Chrissy Teigen's "Chrissy's Court."
There is a push here to an engaging experience. Steven Spielberg is working a scary series for the service, where you will reportedly only be able to watch it if your phone senses it’s dark outside.
There has been a headache for Quibi since before it even launched. Eko, another media-based video company, is suing Quibi for patent infringement. The accusations also include an alleged theft of trade secrets. The issue remains unresolved and does shed a bit of uncertainty.
Can Quibi Survive in a Crowded Content World?
The service reportedly had 1.7 million downloads in its first week. While consumers certainly do like easy access to content, one might say a bit of the experience is lost in a short film or clip. The typical show runs for no more than 10 minutes per episode. In many ways, this service feels like a form of entertainment comparable to scrolling through Youtube.
Something that can only be streamed on mobile devices cuts out a potential audience. Does everyone really want to watch things on their phone screen? Many still enjoy watching a blockbuster for two hours on their big screen. The short time intervals are also a bit limiting to the storytelling. Character development can be a bit difficult in such a short time frame as well.
Not all of the content is focused on film. The company announced a partnership with BCE, a Canadian company, to produce news and sports content.
Dare we question the industrial prowess of Katzenberg? Overall, Quibi is priced competitively for the streaming space. Charging $4.99 a month with ads, it increases to $7.99 without them. You can also qualify for a free trial if you sign up by the end of the month. The question here is the increasingly saturated nature of the streaming market. Netflix, (NFLX) - Get Report Amazon Prime, (AMZN) - Get Report Disney, (DIS) - Get Report and Apple (AAPL) - Get Report all have their hands in the cookie jar.
As we’ve seen with Netflix, it can prove difficult to monetize the streaming model in a way that produces positive cash flow. This is such a new service and approach that it is very difficult to forecast what’s going to happen. Perhaps the shorter content will create a financial advantage in terms of spending. With more than $1 billion put together to pay for content, there is certainly ammo here. Whether it's a sustainable business model is another matter.
This is an ongoing story, and Quibi’s future will be interesting to watch.