While at a business meeting in Dallas with rich people looking for interesting ways to invest their money, I was asked if I knew Meg Whitman. Not knew of her – but like, knew her personally, because, quote, “she’s big in computers and technology in California” and I should “talk to her about some of the stuff yer doing”. So 1- I’ll have my secretary Rosa schedule a lunch with her right away on a day that I’m free and 2- for as dense as that comment was, it gave way to discovery of a completely and totally bizarre new company that she’s now the CEO of…
Katzenberg & Whitman at the helm…
Background/Catchup: Meg Whitman is the former CEO of eBay from back when eBay was one of the 5 biggest websites that existed on a brand new world wide web. More recently she was the CEO of HP where she was… okay. Not revolutionary or as successful as she was in the booming years of eBay but the general review of her tenure at HP appears to be mostly positive, just not exciting.
Jeffrey Katzenberg is the former head of Disney animation when it too was the king in its field, doing its best work of all time (Little Mermaid, Beauty & the Beast, Aladdin, Lion King) and then founded DreamWorks in 1994 to challenge Disney when he felt disrespected by the company.
Together they are launching a digital/streaming video service.
/End of “who are these people?” catchup section…
Quibi: a bite-sized video network
The new company is called Quibi and I don’t know how to pronounce it any more than you do but I’m assuming it’s “Kwibbi” and if so – they should have just spelled it that way instead. If its “Kibbi” then the phonetic spelling with the “K” is, again, superior. And if its pronounced “Quee-bee” then that’s just ill advised all together.
Update: I’ve been informed that it is short for “quick bite” and pronounced as such.
The branding…
Oh, and also its logo is a weird circle with a tail and the company name uses an ugly generic font that doesn’t at all match the style, but other than that it sounds…like something.
The logo isn’t the worst, but it sure is odd. It’s primary colors are pink and blue that smash together with a diagnal gradient purple belt on a “Q” that is really a perfect machine-cut pineapple ring looking “O” that leaves the crisp circle to make an organic looking curl like a pugs tail, to make it a “Q”.
What is known about Quibi so far…
Strange name, strange logo, and it’s a venture of the strangest of people to partner together on something like this, plus the biggest players in Hollywood, $1.5 Billion in capital behind it, and all servicing what sounds like the dumbest way to do, market and contract something like this that I could imagine…
The “thing that’s different” about the platform is that the videos on it will be made short and for cell phone consumption. Specifically, they’re 10 minute long videos and the service wants to debut with 5,000 of those (so about 833 hours of content – which is a lot to start with when its all-new creations starting brands no one has ever heard of on a platform no one has ever heard of).
What makes sense about it..
This makes sense as a venture because Instagram stories and the lengthier Instagram TV videos are getting huge marketshare of watch-hours and before those two existed, it was SnapChat doing the same thing that was the reason Instagram, which is owned by Facebook, even thought to make that a feature. SnapChat’s Discover page contains not only short, several minute human interest stories, news coverage, and YouTube style talk show/vlog clips from partners but also from SnapChats own production arm that makes mostly news talk related videos from a Left-wing/Democratic point of view on politics and culture.
So, making a platform specifically geared toward this market makes sense when 2 competing tech companies are themselves scrambling to tack on this exact feature to their existing user services the same way Apple is now doing with Hollywood style content in its Apple TV+ service launching later this year.
In other words – like I’ve been telling my business partners for a damn decade and a half: creating a useful service to attract a lot of users is great and all, but the real way to leverage that gathering of humans is to keep them within your ecosystem with entertaining stuff to watch.
What doesn’t make sense about it
Quibi won’t have that benefit of being a service that’s tacked onto something that already exists and is popular with a lot of people, so it’s going to have to attract those people to its content based on the merits of its offerings alone.
The company is getting around this problem by signing on big names and studios to make new shows for it.
The Content
Steven Spielberg, the famous Producer/Director and a longtime friend of Katzenburg’s, is going to write scary stories for Quibi. Can he write 10 minute scripts as good as he Directs 2 hour long movies? We’ll find out.
The major studios, including AT&T’s WarnerMedia and Katzenburgs former boss turned rival turned partner, The Walt Disney Co. and its recently purchased subsidiary, 21st Century Fox, along with smaller Indie studios including Lionsgate will be creating original content for the service.
Quibi’s Business Details
Don’t let the bite-sized video fool you into thinking this is a low-budget venture though. Whitman says they’re not building Quibi to be another YouTube – they want it to be more like another HBO. Their budget backs up the claim as the videos they’re making are expected to cost $100,000 a minute to produce, according to the LA Times, which is about 30x what most producers spend on similarly short length content made to be consumed on smartphones.
The deals Quibi is making with these content creators are the most competitive I’ve seen. Quibi pays for 100% of the cost of the productions, but doesn’t own them afterward – they’re merely sponsoring the content creation just so they can license it exclusively for 7 years. After that, they have no claim to it and the creating studios can do with them what they please on their own streaming services or whatever they want. After two years of the agreement, the deal allows for the creating studios to expand their shows from the 10 minute “bits” to full-length tv-episode 20minute+ durations to shop around for distribution elsewhere like networks or other streaming offerings.
The funding for all this content is coming out of over what will probably be around $2 Billion raised by big name funding players Goldman Sachs Group Inc., JPMorgan Chase & Co. (the bank), and the Alibaba Group (Alibaba is a huge Chinese e-commerce company that is often described as being “the Amazon.com of China”). They’ve already raised $1Billion for content creation and $500,000 for the technical build the app and service will require.
The Absolutely Terrible / DealBreaker…
It ain’t free… Quibi will be a paid service. Exclusively. No free version.
If you want access to its library of 10 minute videos to watch on your phone, you’ll have to pay $5 a month and still have to watch ads, or pay $8 a month without ads. Maybe there’s a game changer that makes their content so “must see” that it justifies these price points, but at this stage, that doesn’t appear likely despite the investments and participation of such big content making sources on the platform.
Put me on record as noting that this is a bad idea.
What they should have done instead…
1- Absolutely make it a free service. Especially since all of the content offering is going to be made by other billion dollar production corporations who get to keep the distribution rights of what they’re making on Quibi’s dime, the deals with those studios should be more favorable to the Quibi user base who is essentially test-screening show concepts for those studios and paying for the pleasure. They should get it for free, with minimal ads courtesy of those big studios – not regular-amount-of-ads + a subscription fee because of those big studios. Keep the option to upgrade to an ad-free option, but don’t wall the whole thing off as a premium service exclusively. That’s not smart unless you have some really powerful hooks that haven’t been announced yet.
Examples would be bite-sized episodes from intellectual property the public is already familiar with – eg: Disney making a Star Wars animated series similar to their 2003 Clone Wars series that aired on Cartoon Network in small 2 minute long episodes (stitched together and shown below), NBCUniversal doing the same thing with a Minions series and other properties they own like The Secret Life of Pets, Despicable Me, and so on with characters who are much better suited to inhabit 10 minute stories than hour+ long movies.
Instead of banking on familiar franchises spawning new short-format spin-offs and supplementing that main push with original entertainment ventures, they’re doing the reverse (if pre-existing franchise IP even comes to the platform at all).
2- Incorporate Influencers & New Talent.
Quibi doesn’t want to be YouTube because no one wants to be YouTube, including YouTube – we get it. Big Studio production is where the money is. They want to be a premium outlet just like everyone else. Fine. But getting people to pay a monthly fee for content they don’t know anything about is risky and unnecessarily so when you could mitigate that risk by adding personalities who already have followings to your platform with enticing deals that encourage them to stay there and maybe even leave YouTube all together some day.
The high-production-value aspect Quibi is going for is fun and fine and good luck to them with it – but it should be supplemented by a tier of millennial up & comers from social media, now boosted with big fat Hollywood budgets to do extensions of what they’ve been doing themselves from their bedrooms and whatnot.
YouTube Red failed because no one wants to see “their favorite YouTube stars in low budget Hollywood style movies” – they want to see their favorite YouTube stars doing more and better versions of what they already know and like those stars for doing. They don’t want to see PewDePie in a romantic comedy – they want to see PewDePie play video games and comment on news or whatever he does. Thus, a PewDePie YouTube Red late night style talk show format where he has a monologue, interview, and variety-show-esque segment could have been a big draw – but YouTube wasn’t interested. YouTube didn’t understand that YouTube fans don’t want to see Logan Paul in a horror movie (which YouTube Red tried to do with “The Thinning”) – they want to see Logan Paul do goofy heightened-reality silly-douche stuff. And so on.
A free version with lots of new stars empowered to do their own thing with minimal constraints on a platform that entices you to upgrade to a premium version without ads and with more content seems so obvious to me as the way to go here that it will be interesting to see what Quibi actually turns out to be and whether it is successful or flops.
Developing…
