For a lot of the market, when we talk of launching a streaming video platform we think of the concerns of content owners that are more constrained by budget and scope, and how they need to acquiesce to the strategic realities how much they can grow their service following launch. Interestingly, no one ever seems to be interested in applying these same concerns to larger platforms when they launch (with much fanfare), and some recent news seems to indicate that they should.
Jeffrey Katzenberg, the former Chairman of Walt Disney Studios and CEO of Dreamworks, alongside former President and CEO of Hewlitt Packhard Meg Whitman, are launching a new streaming video platform service – Quibi. Earlier in 2018 Quibi announced it had completed a $1 billion financing round, and is expecting to spend nearly half of that to buy content for its mobile focussed service. The service will be focused on short-form content, with most shows clocking in at several minutes and nothing running over 15 minutes in length. This is all part of the lofty stated goal of ‘reinventing television’ (where have we heard that before).
It does seem, however, that while they tumbled head over heels into gargantuan piles of money, the people running Quibi appear not to have considered reality checking themselves. Let’s look at their proposed commercial model – Quibi plan to offer a $5/month ad supported tier and $8/month ad-free option. With dollar signs floating past their eyes like Scrooge McDuck, the execs seem not to have realised that on almost every streaming video platform out there, an ad funded model means no subscription. Audiences understand that viewing ads is the equivalent of paying for content, and they really don’t like the idea of paying for something and still be advertised to (ads about upcoming content on the platform also grate but aren’t quite as egregious).
Combine this with expected subscriber rates – within 5 years, Quibi expects to have reached 11 million, 20 million or 70 million subscribers, depending on the scenario. The question here is, when the entirety of this streaming video platform is focused on delivering exclusively short form content, is it likely that viewers are going to pay in those kind of numbers to join? It has taken HBO three years to hit around 2 million subs for its HBO Go service, and that is home to some of the biggest shows on television.
Here’s a relatively concrete example, on Variety’s Strictly Business podcast recently, Katzenberg said that the time it takes to find the kind of content you want to watch on Netflix is too long at 8 minutes. “The biggest challenge is the volume of content,” Katzenberg said, explaining that Quibi wanted to serve up 5,000 quick bites of content in the year following its launch. But the major challenge for discovery on Netflix is sifting through the sheer volume of content they have, and 5,000 ‘quick bites’ ends up presenting the same problem, especially on mobile, regardless of how short they are.
This isn’t to say that the monster funding and heavy studio support cannot help, but for any new streaming video platform to pull in that many subscribers in so short a space of time is… ambitious. It comes back to what we said above, realistic expectations for launch and growth goes a very long way in setting targets for sustainability, and the publicly released goals of Quibi seem to be way beyond that. They’re giving themselves a year to build out a platform that will revolutionise the concept of TV on mobile, and be able to handle incredibly large audiences very quickly (and, if they hit their numbers, become one of the world’s largest streaming platforms in an relatively short period of window from launch). Time – and cold, unflinching reality – will only tell if it’s possible.Contact Airbeem