Deeper Dive—Hopefully, Quibi knows what it’s doing

Quibi has a well-financed vision of making high-quality, bite-sized content designed for quick views on mobile devices. But is the startup making a mistake by putting all its content eggs in one platform basket?

That’s the big question that arose this week when Digiday reported that Quibi, which was founded by Hollywood legend Jeffrey Katzenberg, is reworking its strategy to focus on mobile only, and skip making any connected TV apps. The company hasn’t changed its plans to bring on big-name talent to create high-profile shows distributed in mini-episodes, but it is now planning to only distribute those shows on mobile devices.

There are figures that support Quibi’s decision, like Cisco’s forecast that 79% of global mobile data traffic will be video by 2022, up from 59% in 2017. But there is also data showing that the TV screen is still a key source of entertainment for many people. Parks Associates found that 52% of U.S. broadband households surveyed now watch online video (SVOD, AVOD, etc.) on a connected TV. Conviva said connected TV viewing hours increased 121% in 2018 and that connected TVs represented 56% of all streaming viewing hours for the year.

Regardless of the data points, Quibi’s reported move inevitably draws comparisons to other mobile-focused, short-form content endeavors that didn’t pan out, like Vessel and Go90, which cost Verizon more than $1 billion before the company shut it down last year. It’s a move that could cause Quibi to miss out on a big potential audience, and hamstring the company even if it’s successful on mobile, according to Colin Dixon, founder and chief analyst at nScreenMedia.

“I understand why they did it, but my gut tells me it’s a mistake,” he said.

Dixon compared Quibi’s plans to a similar strategy by Denmark broadcaster TV 2, which has previously released series as a daily drop of seven-minute episodes on the web and before gathering them together to broadcast on TV on Fridays. Dixon said TV 2 had a good amount of viewership on mobile, but the biggest audiences was for the omnibus episodes at the end of the week.

“I think the big screen is still important, even for the kids,” said Dixon. “You cannot think one screen in this world anymore. You just can’t.”

Of course, even if Quibi launches with a mobile-only strategy, there’s nothing in the rules that says the company can’t later add streaming TV apps, or even try a similar tack as TV 2 and offer up its content recut as longer episodes or even feature-length movies. But Quibi may not have much time to decide if it wants to go that route.

According to Digiday, Quibi is looking for seven-year exclusive rights for its movies and TV shows, but that only covers short-format versions. After two years, studios can reassemble Quibi series into longer installments and license those versions elsewhere.

If Quibi’s licensing deals seem a bit unorthodox, the company’s investors are traditional Hollywood: Disney, Warner Bros., Fox, MGM and Sony Pictures. It’s an impressive group and it’s matched by the auspicious creators and brands that Quibi has already done deals with like MTV, Guillermo del Toro and Justin Timberlake. It’s a growing list and it sets Quibi apart from failed services like Go90.

“Go90 was a different thing,” said Dixon. “Quibi is high-end and it’s working with producers who have made quality content in the past.”

Quibi clearly has a lot of talent and backing in its corner, and its veteran leadership like CEO Meg Whitman has a proven track record of success. But restricting distribution to only mobile devices sounds like a big gamble that could derail even the best laid plans.