The end of Quibi
Quibi, the Hollywood suits answer to online video, is to shut down after just 6 months.
Having raised over $2 billion, the short-form video app, launched by the legendary former Disney boss Jeffrey Katzenberg had promised to re-invent the way we consume entertainment whilst seemingly to completely misunderstand how people consume entertainment.
So what went wrong and more importantly what does the failure of this incredibly well-funded, industry-supported venture tell us about the state of entertainment in a mobile-first world?
Our failure was not for lack of trying
In a public letter sent out on Wednesday Katzenberg and Quibi CEO Meg Whitman wrote that they were winding down the company, selling-off it’s content and technology assets stating that “our failure was not for lack of trying”.
But it seemed obvious to anyone outside of Quibi and the handful of top-tier filmmakers they had convinced to create content for the platform that they were doomed to fail from the off. The idea that people would pay for “premium” short-form mobile-only video content seemed bizarre even during the media circus around the app’s launch.
What Katzenberg and many others within the film and TV industry don’t seem to be able to grasp is that for many the video content they view on their phone has no differentiated value. Watching a funny cat video on Youtube, or the latest re-working of the Ocean Spray video on Tik Tok is as valuable and meaningful to people as any high-budget narrative short-form video from a major Hollywood director, in fact, it’s more valuable.
Why? Because it’s the expression of the individual’s taste. Not that of an academy award-winning auteur.
Arbiters of taste
What Quibi seemed to miss is that there are no greater arbiters of taste thenGen-Zs’ and millennials themselves. These young people have grown up being bombarded by more than 1,500 pieces of content vying for their attention every single day of their life and they have become expert curators of their own culture.
Even the great Jeffrey Katzenberg can not make a hit online. They happen because millions of people choose to spend 20 seconds watching a guy on a skateboard drink an Ocean Spray to the sound of Dreams by Fleetwood Mac. Of all the millions of videos available they spend 20 seconds with this.
Why? Not because it’s “premium” content, though it is wonderful, or because it has some named actor who used to be in that show they liked 5 years ago, but because it encapsulates a moment, a mood. In the craziness of the pandemic, with governments faltering, job insecurity on the rise this is 20 seconds of unadulterated freedom and joy.
Where’s my signal liquidity?
One glaring omission from Quibi was the ability to share videos to other platforms, thereby hampering any opportunity for the content to spread virally, and on top of that a lack of social functionality within the app itself. Not only could I not comment or discuss content with other users but the algorithm didn’t seem to do a good job of learning what I might like or want to watch. In an era of algorithmically driven viewing, Quibi had no chance because it lacked signal liquidity as Scott Galloway, Professor of Marketing from NYU Stern, put it.
Galloway talks about the power of Tik Tok’s algorithm to drive repeated viewing. Where Quibi can observe you watching 6 mins of Flipped, a show about a house-flipping couple caught up with drug cartels (I mean really is this what we are calling “Premium content”), the AI will recommend another show for you watch straight after based on 1 or 2 signals to do with the cast or genre of the show. In the same breath, Tik Tok has more than 100 signals from the roulette wheel of short-form content it’s served to me learning more and more every second what I like and what makes me stop.
This ability to hold our attention is prevalent across all social and video platforms to a greater and lesser extent and Quibi’s lack of ability to hold our attention is another major reason for its downfall.
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From the outset, Quibi seemed to believe it was in competition with Netflix and Disney+ when in reality its competition was those platforms but also more importantly Tik Tok, Snapchat, Instagram, and YouTube.
Reed Hastings, now co-CEO of Netflix, famously said in 2019 that the streaming platforms were in competition not just with other video platforms bit the broader entertainment industry including the growing video games market.
Hasting said “We earn consumer screen time, both mobile and television, away from a very broad set of competitors,” adding that Netflix now “compete with (and lose to) ‘Fortnite’ more than HBO.” It seems Katzenberg and his team didn’t fully understand the challenge and how we consume entertainment today, the very thing they set out to re-invent with Quibi.
Tom Jarvis – Founder & Managing Director