Quibi’s founders like to say their mobile video streaming platform is not a typical startup. So perhaps it’s only fitting that the company is launching in the midst of an unprecedented global event that has introduced even more variables it can’t control.
As the April 6 launch date arrives, even the team building the service has no idea whether their timing is auspicious or catastrophic. Amid expanding coronavirus lockdowns, video streaming has been booming. But Quibi is introducing a product designed to be consumed while people are on the go at a moment when most people are going nowhere.
These and a host of other factors have created an unpredictable atmosphere ahead of the release. After weeks of last-minute scrambling to finish the product, the company has to trust that the hunger for more entertainment will allow it to overcome the current social and economic turmoil.
“We’re really in uncharted territory as an industry with Quibi,” said Dan Rayburn, a streaming media analyst at research and consulting firm Frost & Sullivan. “It’s a new type of service trying to fill a different type of segment of the market.”
Quibi arrives amid a frenzy of streaming platform launches. For years, pioneers like Netflix, Amazon Prime Video, and YouTube dominated this sector. But last fall saw the launch of Apple Plus and Disney Plus. And NBC Universal’s Peacock and HBO MAX are coming soon.
That would be an extraordinary market dynamic on its own. But starting last month, the COVID-19 pandemic caused governments around the world to issue stay-at-home orders, bringing the global economy to a grinding halt. At the same time, video streaming rose 20% in late March, potentially accelerating a shift to on-demand viewing.
Certainly, Quibi is hoping to ride that wave by targeting a younger, mobile-first generation. Its name is an amalgam of “quick bites,” and the platform is built to deliver videos of under 10 minutes to smartphones. The app will launch with nearly 50 shows and aims to have 8,500 episodes across 175 shows within a year. Quibi costs $4.99 per month with ads and has an ad-free premium layer for $7.99 per month.
All the content on Quibi is exclusive, and the company touts plenty of top-tier talent and high production values. Content includes titles like Most Dangerous Game, starring Liam Hemsworth and Christoph Waltz; Survive, starring Game of Thrones’ Sophie Turner; and Flipped, starring Will Forte. The categories of content include what Quibi calls Movies in Chapters, Unscripted and Docs, and Daily Essentials. The latter includes daily news shows by the BBC and NBC that were made specifically for Quibi.
While all major streaming services have some kind of mobile application, Quibi will be the only one designed specifically for smartphones. The company is not even developing versions of the apps optimized for tablets.
“As a first mover in this area, it is a great opportunity for Quibi, but the challenge is of course that this is untested territory,” said Tony Gunnarsson, a video streaming research analyst at Ovum. “Focusing on younger demographics makes sense. But will they be prepared to pay for the service? I mean, $4.99 per month (and you still get adverts) isn’t particularly expensive, but I think it’ll be borderline for many younger people.”
Tech and creativity
The platform is the brainchild of Meg Whitman, former CEO of HP and eBay, and Jeffrey Katzenberg, the former Disney executive who founded Dreamworks Studio. Quibi says its founders’ backgrounds are reflected in the way it melds the technological and creative aspects throughout every step of the content creation process.
“What we’re building here is the result of a totally unique collaboration between creators and technologists,” said Rob Post, Quibi’s chief technology officer. “We’ve been having these integrated technology and creative conversations every day. This is what’s driving the innovations in both our stories and our technology.”
The best example of this is Quibi’s “turnstyle” technology. In thinking mobile first, the company wanted to address people’s natural instinct to hold their smartphone vertically when moving and then switch to horizontal views when resting or sitting.
All phones and streaming apps have some kind of auto-rotate features, but Quibi takes this one step further by having content creators shoot all video with cameras optimized for both viewing positions. These two video streams are then stitched together with the audio and sent as a single stream to the smartphone. Ideally, that means no lag when the phone rotates, as well as an image that always fills the whole screen.
However, the tradeoff for customers is that bandwidth use will be higher. Post said Quibi has been discussing this issue with carriers, particularly one of its main partners, T-Mobile.
“This does require a little bit of extra bandwidth in order to deliver the experience onto the phone,” Post said. “But we’ve been tuning it for quite some time, and we’ve been working with the mobile carriers, and we’ve been working with the device manufacturers as well. Our compression technology benefits from the fact that a lot of these shots and scenes are very similar. Ultimately, we think that we’ve struck the right balance for the user on requiring a little bit of extra bandwidth at the same time we’re creating this beautiful rendering and playback experience.”
What makes Quibi such an audacious bet is the decision to commission all new content that is specifically conceived for its platform. While Disney Plus is all original, much of that content is first released in theaters or cable stations and is supplemented by the company’s merchandising, theme parks, and cruises. Apple Plus is all original content, but the company is building its catalog slowly and Apple can subsidize it with huge profits from its hardware business.
Quibi’s success is wholly dependent on a new slate of titles presented in a unique format.
“There’s no denying that Quibi is an odd sort of startup,” Post said. “On the one hand, like any new venture, our team has come together in a little more than a year and then built the entire business and product from scratch. On the other hand, our ambitions to create an entirely new medium means that we’re investing hundreds of millions of dollars in content production. Trust me, it’s as obvious to me as it is to you that this makes us a unique startup.”
The app is designed to make it easy for people to navigate this host of new titles. There are just four tabs: For You, Browse, Following, and Downloads. The first is a news feed powered by Quibi’s algorithms to match a viewer’s interests. It’s designed like a series of cards that viewers can flip through. The Browse section has a search bar, as well as categories like New Releases. Viewers can select shows they want to follow to get notifications about new episodes. And they can download as many as they want to watch offline.
But there will be some restrictions when it comes to viewing that content. For instance, accounts can’t be shared between family members.
Seeding the app with sufficient content has meant not only ramping up production but also attending to countless details that might typically be handled separately by studios. Quibi’s team has to design all the art metadata for its 50 launch shows. This involved creating 5,000 pieces of artwork, including the title treatments, posters, and descriptions.
On a positive note, the company said it has sold out all of its advertising inventory for the entire first year. That includes major sponsors such as Progressive, Discover, General Mills, Procter & Gamble, AB InBev, Taco Bell, Pepsi, T-Mobile, Google, and Walmart. However, Rayburn notes that it’s not entirely clear what this means since Quibi can run as many or as few ads during a show as it wants.
The massive content investment has placed additional pressure on the technology side. The company has developed a set of best practices for content partners to help them shoot their video in formats that won’t become obsolete as the shapes and sizes of smartphone screens evolve. Given the high quality of the video production, the platform’s performance also needs to be flawless.
“One side effect of that content investment is that there’s no room to deliver a so-called minimal viable product,” Post said. “The product has to deliver a mature offering from the get-go.”
In the months leading up to the launch, Quibi has been spending millions on an advertising blitz across television, newspapers, and digital. Customer acquisition is typically one of the major expenses for any video streaming service so delaying the launch now, after hyping the start date for months, would be extremely costly.
But sticking to the date has also presented challenges. Like everything else, this huge undertaking has had to adapt over the past month to the coronavirus pandemic, which has meant last-minute work on the technical side.
“We all started working from home about three weeks ago,” said Tom Conrad, Quibi’s chief product officer. “As with the rest of the world, this is not something that we anticipated. But it’s been really kind of incredible the way the team has come together to continue to push forward to get this product out into the world.”
On the content side, the company has been scrambling to adapt to a pandemic that has shut down most types of film and TV production. Conrad said there are enough shows that are either completely finished or in final postproduction to allow Quibi to maintain its planned release cadence through the end of the year.
But part of the content strategy has been built around the Daily Essentials category, with new episodes every day that are intended to keep people coming back to the app. Those were supposed to be produced in studios in New York and Los Angeles. Now, like many other late-night and talk shows, they are being produced from people’s homes.
“We feel confident about our ability to deliver on our ambition of new content daily,” Conrad said.
The lockdown poses another dilemma in terms of the fundamental use case for Quibi. Executives have talked about the app being a great way to consume content when a viewer is on the go or during various in-between moments throughout their day. With millions quarantined and stuck at home with their big-screen TVs and cable and several other streaming services, will there still be that same niche for Quibi to fill?
“That’s a great question,” Post said. “I find that with my workday, I’m trying to remind myself to take a small break, stand up, walk around, go outside. I think our use case [comes down to] these in-between moments, whether you’re on the go or not. I think now more than ever, the use case still persists.”
The decision to move ahead with the launch is also driven, in part, by the desire to finally start gathering real data on usage. “One of the things that we’ve been anticipating for some time now is starting to collect some data on how users are really interacting with our app,” Post said. “We’ll definitely find out the day we launch what users like and don’t like.”
Rayburn said that Quibi faced a large number of hurdles even before COVID-19. In contrast to a service like Apple or Disney, Quibi doesn’t have an ecosystem of products and services to draw in new viewers. And limiting itself to one type of screen with untested content while having very little real knowledge about consumer preferences is a big risk. He agrees that launching is a necessary step because the company urgently needs that data to start learning and adapting things like episode lengths.
“They’re actually trying to do something really large, which is change the way consumers in the U.S. consume video on mobile,” Rayburn said. “I think that’s quite a big undertaking, and trying to do it all at once through all these different avenues at the same time with restrictions is a little too much, frankly.”
Because Quibi is offering a free 90-day trial period, it will still be several months before it’s clear whether people who sign up are sticking with the service. But with the curtain finally lifting, Post said he’s confident Quibi is ready for its big premiere.
“It’s always been our ambition to bring a little bit of entertainment, inspiration, and information into the world,” Post said. “And that charge feels more urgent today than ever before.”
The company has raised $1.75 billion in venture capital ahead of the launch.