It sounds like a parody of a television show pitch. “A documentary about luxury dog houses, called Barkitecture.” “A drug cartel kidnaps home-renovation TV stars and forces them to remodel their homes, in a show called Flipped.” “Dummy: an aspiring writer befriends her boyfriend’s sex doll.”
In fact, all these shows made it on to Quibi, the bite-size TV platform created by Hollywood mogul Jeffrey Katzenberg and veteran tech executive Meg Whitman. What sounds like a joke is shaping up to be one of the most disastrous US start-up launches of the era — with more than a few lessons for wannabe media investors.
For $5 a month, Quibi promises “quick bites” (10 minutes or less) of Hollywood-quality content for consumption on the go by users unfulfilled by YouTube, TikTok, Facebook, Spotify, Snapchat, Instagram, Netflix, Hulu, Pinterest, Amazon Prime, Twitch, Roku, CNN, ABC, NBC, CBS, or any of the other media already available on any smartphone.
To say Quibi was launching into a crowded market would be an understatement, but it does have distinguishing features. Shows are shot so they can be viewed vertically or horizontally — an expensive service for people unable to rotate their phone screens 90 degrees. Quibi also largely blocks sharing the videos or clips, something that hampers word-of-mouth excitement.
Quibi is not quite a billionaire vanity project, as Katzenberg and Whitman had the sense to raise $1.8bn from TV studios, financiers such as Goldman Sachs and other investors, including Chinese ecommerce giant Alibaba, rather than putting their own fortunes on the line. But there are similarities. The company announced itself in February with an ad during the Super Bowl, US television’s costliest piece of real estate, in between a pair of commercials selling the presidential candidacy of Michael Bloomberg.
Quibi’s free-trial app was in the 50 most popular downloads for barely a week after its April launch and reviewers were not kind. Engadget called it “a complete waste of time and resources”. Vox Media’s Vulture said of the service’s “movies in chapters” that “you can still hear them screaming, ‘I’m a movie!’ even as Quibi shovels dirt over their short-form-mobile-storytelling graves”. Katzenberg himself said the news bulletins Quibi calls “Daily Essentials” were “not that essential”.
By mid-May, Katzenberg was lamenting in a New York Times interview that viewership was “not close to what we wanted”. He blamed “everything that has gone wrong” launching an on-the-go service just when everyone was told not to go anywhere, but most commentators doubted coronavirus was at the root of the problem.
Media has always been a brutal destroyer of wealth for those who fail to get it right, but never more so in an age where everyone on the internet is a content producer and the web provides a landscape too big for even billions of eyeballs to survey. Many old news brands have resisted the attempts of tech moguls to restore them to profitability — ask Facebook co-founder Chris Hughes about The New Republic magazine. Meanwhile, Hollywood continues to attract wealthy scions with mixed results — ask Oracle’s Larry Ellison about his daughter Megan’s movie production house, Annapurna. It’s proved quite a hill to climb.
The scale of the ambition on display with Quibi is quite something when you consider Katzenberg and Whitman are attempting to create and promote not just a video catalogue but also a whole new platform, without user-generated content or the back catalogue of Disney or HBO, and without connections to customers of the kind that Netflix had via its DVDs-in-the-mail business or Amazon had through ecommerce. Brute-force marketing is not enough to bring people to a new platform today, and neither is weak, unshareable content.
The two executives have promised to quickly retool Quibi for the pandemic and post-pandemic era. Both have had impressive careers — Katzenberg at Disney and DreamWorks Animation, Whitman at eBay and Hewlett-Packard. They cannot be counted out. But round one went to the critics who pointed out that Quibi’s sputtering launch demonstrated there is a fine line between ambition and hubris.
Stephen is reading . . .
The Great Influenza by John M Barry. This definitive narrative of the 1918 flu, which shot back up the Amazon charts for obvious reasons, sets out how mis-steps and misinformation can exacerbate a deadly pandemic.
Follow Stephen on Twitter @StephenFoley
This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment.
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