Last week, I wrote about the dominant player in the online video subscription market — Netflix — and how just in the past year and a half or so, there were two competitors that emerged. One has a shot to unseat Netflix’s dominant status, while the other — well, it’s now no more than a distant afterthought. Today, I’m focusing on that afterthought, Quibi.
Why did it fizzle and fade so fast? First, it was really built on two overarching strategic pillars:
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- Mobile-only, not mobile-first. Quibi recognized that today’s younger consumers are consuming content on-the-go. Their mobile devices are used for everything. Gen Z consumers watch videos on their mobile devices more than on traditional television. So Quib was built solely for mobile devices. The content was shorter — every episode was no more than 10 minutes. And technology was built assuming you’re watching on mobile. In fact, every video was formatted so you could watch it seamlessly in landscape and portrait (actually, a very cool feature indeed).
- A-List content from scratch. It was accepted that content is king — however, Qubi had no pre-existing content. So they sought out A-list stars like Jennifer Lopez, Kevin Hart, and others to create new, fresh content. But that content came at a cost. Quibi’s $1.75B in capital raised is widely talked about — but over $1B was meant to be used for creating content.
Lots went wrong, though.
- We dusted our televisions off last year. It’s true that Gen Z favors their mobile device. But even the most mobile generation doesn’t only rely on their mobile device to watch video content. The onset of COVID19 didn’t help. People were pushed back into their homes and now had this giant screen in their living rooms just waiting to be used — with no more daily commute to keep people away from it.
- Fresh Content + Back Catalog > Fresh Content. It’s true that content is king — but it’s also expensive. Quibi relied on creating fresh content from scratch rather than relying on back catalogs of existing content. It may have been somewhat necessary to go all-in on a mobile-only approach. But it meant that every single piece of content Quibi offered came at an incredibly high fixed cost.
There are lots of other reasons why Quibi crashed and burned. But another competitor that launched its own streaming service had a completely different fate. One that’s still playing out before our eyes.
Next week, we’ll dig into Disney+ — which very well may be Netflix’s biggest competition yet.
