While there may be numerous reasons Quibi’s mobile video platform has been a bust so far, launching during the pandemic was the worst possible timing.
According to a new video streaming report from Adobe, the number of videos people started watching on mobile dropped 1% year-over-year in April and continued to fall through June, when it was down 35%. While Adobe’s 2019 data made a Quibi-like service seem promising, pandemic-driven lockdowns have reduced demand for the kind of bite-sized entertainment the company hoped to exploit.
Even though many observers raised this issue in the days leading up to the April launch, Quibi executives maintained a bullish outlook as other forms of video streaming surged during the initial weeks of coronavirus lockdowns. But while streaming overall did explode, video on mobile devices took a nosedive.
“When we looked at video starts across platforms, mobile was seeing growth in 2019, as well as the first few months of 2020,” the Adobe report reads. “It was an opportunity area for content providers. After COVID-19, shelter-in-place orders have shifted this significantly. While the Adobe Digital Economy Index shows growth in areas like mobile shopping, video consumption on mobile is not driving growth.”
Quibi arrived amid a frenzy of streaming platform launches. For years, pioneers like Netflix, Amazon Prime Video, and YouTube dominated this sector. But fall 2019 saw the launch of Apple Plus and Disney Plus, followed this year by NBC Universal’s Peacock and HBO Max.
Still, Quibi managed to cut through the hype, thanks to two high-profile cofounders: Meg Whitman, former CEO of HP and eBay, and Jeffrey Katzenberg, the former Disney executive who founded Dreamworks Studio. The company raised $1.75 billion in venture capital ahead of the launch to build out the platform and develop a wealth of exclusive content. The shows were shot in short segments to target a younger, mobile-first generation. Quibi’s name is an amalgam of “quick bites,” and the platform is built to deliver videos of under 10 minutes to smartphones. The app launched with nearly 50 shows.
But Quibi fell flat from the start. The app quickly dropped out of the top downloads in app stores, and by the end of May it only had 1.5 million active users, according to the Wall Street Journal. While the company had hoped to have 7.4 million subscribers by the end of 2020, it has now reduced that projection to 2 million.
Quibi has since announced plans to address some criticisms, such as the inability to share screenshots and clips on social media or to beam the service to televisions. But the service will continue to swim against the tide as long as the pandemic keeps people at home.
The Adobe report analyzed more than 24 billion video starts and 6.6 billion hours of video content viewed on OTT, desktop, and mobile phone platforms in the U.S. between January 2018 and July 2020. The findings echoed previous reports that video streaming has been booming. But while mobile video starts are down, desktop viewing has taken an even bigger hit, falling 21% year-over-year in April and dropping 40% in July.
In terms of overall viewing time, OTT has surged as much as 196% in April 2020, compared to April 2019. That number tapered off to 60% in June as many states began to lift lockdowns, but it soared again to 116% in July amid an explosion of coronavirus cases. Even during the brief period of optimism in June, overall mobile video viewing was down 21% from the previous year.
Speaking to reporters ahead of Quibi’s launch, executives acknowledged it would have been difficult to postpone. The company had already spent millions on an advertising blitz across television, newspapers, and digital. Customer acquisition is one of the major expenses for any video streaming service, so delaying the launch after hyping the start date for months would have been extremely costly. CTO Rob Post said he believed people stuck at home might still have in-between moments Quibi could fill. But he also said there was a strong desire to get the product in users’ hands so the company could start learning.
“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 at the time. “We’ll definitely find out the day we launch what users like and don’t like.”
So far, the lessons have mostly been painful. Whether Quibi is able to recover may depend as much on how quickly the company can iterate on its product as on how long it takes the U.S. to get the pandemic under control.