The Fall of Quibi

Recently, I’ve been working on practicing gratitude. Every morning, I write three things down that I’m thankful for:

  1. My health
  2. My friends and family
  3. That I’m not an investor in Quibi

Quibi, the brainchild of former Dreamworks co-founder and Disney chairman Jeffrey Katzenberg and former Hewlett Packard CEO Meg Whitman, was promised to be the next big thing in video streaming. Designed specifically for smartphone consumption, Quibi provides users exclusive television and movie content packaged in five to ten minute segments, effectively called Quibis. These bite sized videos are supposed to be perfect for watching on the subway, during a bathroom break, or while waiting in line for a coffee. Another big selling point is the company’s proprietary ‘Turnstyle’ tech that adjusts the point of view of video and fills the screen regardless if it is being viewed in portrait or landscape mode. This means no more black bars on your screen. The app, which launched smack in the middle of the pandemic on April 6th, raised a mind-blowing $1.75 billion from a slew of high profile companies like Alibaba and numerous Hollywood studios who were attracted to the co-founder’s previous successes.

However, exclusive star-studded content and intuitive technology were not enough for users to change their viewing habits. By May, it had already fallen out of the Top 100 apps in the App Store. As of June, Quibi projected a total of 2 million signups by April 2021, a mere 30 percent of its initial 7.4 million user estimate. And now as of last week, it’s recently been reported that 90% of users cancelled their accounts after the three-month free trial expired. Trouble in paradise.

So where did Quibi go wrong?

  1. Katzenberg underestimated the power of the coronavirus. Quibi was easily able to delay their launch, but decided against it. Now, many of the scenarios where people would be watching videos “in a Quibi” (ten minutes or less) have been eliminated. Nowadays, we have nothing but time on our hands. Now, Katzenberg has attributed “everything that has gone wrong to the coronavirus.
  2. They misjudged consumer behavior. Katzenberg and Whitman were placing a huge bet that people would want to watch TV and movies on their mobile devices. So far, this has proven to be incorrect. The digital landscape has an abundance of free short form content like TikTok, Youtube and IGTV. Why would someone decide to pay for Quibi when they have all this at their disposal? Especially when they are already most likely subscribed to three streaming services, all with high-quality content that users know they want to see.
  3. In an attempt to keep the content exclusive, the Quibi team decided it would be smart to wall itself off from the rest of the internet. Content from Quibi was unable to be shared on Twitter, Instagram, Facebook, Reddit and more. Users weren’t even able to take a screenshot of the app on their phones. (This is also the case with Disney+, but when you have 55 million subscribers in less than 9 months, you can do what you want). By prohibiting users from sharing content on their social media (think clips and screenshots that turn into viral memes), Quibi essentially shot itself in the foot losing out on millions of dollars in free marketing.

These are only a few of the many reasons why Quibi hasn’t lived up to its potential. There’s still time to turn it around, but with a second wave of the virus impending, things aren’t looking too good. No matter which way you hold your phone.

© Randy Ginsburg, 2020 | Want to chat? Email me at randy@randymginsburg.com