Just six months after launch, Quibi is calling it quits. The streaming service, whose name is derived from the phrase “quick bites,” was originally designed to fill smaller gaps of time, like waiting in line for a coffee or during your morning commute on the subway.[i] Just as the service launched, however, the coronavirus changed the everyday landscape of media consumption. This, combined with a number of other factors, led to service’s quick demise.
Quibi drew skepticism on its projected success from the very beginning, though many were excited about its potential due to co-founder Jeffrey Katzenberg’s reputation as a Hollywood heavyweight. The company simply didn’t have the capital to compete with major competitors like Netflix and Amazon, and their content didn’t stack up.
“It is really hard to break in now as a new player on the content side, especially as a subscription app without a free initial offering,” said Rich Greenfield of media research firm LightShed Partners. “But if there was must-have content that people couldn’t live without, they would have subscribed. The numbers speak for themselves.”[ii]
What do the numbers say? Originally, it was projected that Quibi, which costs $4.99 per month, would hit 7 million subscribers within its first year after launching. As of a few weeks ago, however, the company reported only about 500,000 subscribers.[iii]
Quibi launched during what may superficially seem like a great time for streaming. According to a survey by NScreenMedia, streaming viewership skyrocketed during the early days of stay-at-home orders. 68% of Disney+ viewers increased their consumption during lockdowns, compared with 66% of Hulu and Netflix viewers and 56% of Amazon Prime users.[iv] In fact, Disney+, HBO Max, and Peacock, all of which launched in the past year, have all faired pretty well. So, why not Quibi?
The short answer is that Quibi creators just didn’t know what Quibi was. There was no value proposition, no market segmentation, and no understanding of the potential consumer. They couldn’t answer the basic question: why do consumers need this?
Quibi was designed to be consumed on smartphones. This was meant to be a differentiator – watch from anywhere, at any time, without having to pause and come back to the same episode! But, as Caroline Framke said for Variety, “Isn’t this just an expensive YouTube?”[v]
The team behind Quibi failed to recognize that people have been consuming high quality, short-form media for free for a long time. Even more crucially, they failed to understand that TikTok was a bigger competitor for the streaming service than any of the major TV-based services.
On top of this, none of the company’s marketing told their audience anything about what Quibi offered. They launched marketing efforts months in advance of their launch that left viewers wondering exactly what they were offering. Additionally, the phone-based platform didn’t adapt well to the lifestyle change that came with lockdowns. Consumers wanted to stream from their TVs, but Quibi wouldn’t allow for casting.[vi]
Related to this failure to understand how their audience likes to consume media is the issue of demographics. A phone-based streaming service lends itself well to a younger demographic – Zoomers and Millennials would be great potential users for the platform. These groups tend to generate buzz online by sharing screengrabs, GIFs, or other meme-worthy images from their favorite shows. Quibi, however, did not allow for screenshots. Essentially, their content was not shareable[vii] – despite the variety of content available to viewers.
One of Quibi’s few strengths was the name recognition behind their shows – from Chrissy Teigen to Anna Kendrick to Christoph Waltz and Liam Hemsworth,[viii] Quibi had a lot of star power under their belt. Drag Race winner Sasha Velour showcased queer New York City artists while Keke Palmer and Joel Kim Booster rebooted MTV’s “Singled Out” with great vivacity. The platform even hosted a shortened version of “60 Minutes” and other news programs.[ix]
Despite this tremendous catalogue of talent, the company’s next steps will be to decide how to wind down their operations and repay their investors. Katzenberg and Quibi CEO Meg Whitman still believe they’ve done something worthwhile, however.
“In the end, we didn’t get the support of consumers and customers in the way we had to to make this a successful business,” they said.[x] “Although the circumstances were not right for Quibi to succeed as a standalone company, our team achieved much of what we set out to accomplish, and we are tremendously proud.”[xi]
Questions for Marketing Managers to Consider:
- If you were a marketing manager for Quibi, how would you have segmented the potential audience? What tactics might be used to reach them?
- What can be learned from Quibi’s failure to revolutionize streaming consumption?
- If TikTok is truly Quibi’s main competitor, what has TikTok done to become so successful that Quibi failed to capitalize on? Would this be a distinctive core competency?
- In terms of public relations, how well was the closure handled by Quibi executives?
[i] Lawler, Kelly. Oct 2020. “Quibi Shuts Down Aftere Six Months: Of Course it Failed.” USA Today. Retrieved from https://www.usatoday.com/story/entertainment/tv/2020/10/22/quibi-shuts-down-after-six-months-heres-why/3725358001/
[ii] Garcia-Hodges, Ahiza. Oct 2020. “A Look at Why Quibi Failed so Soon After Launching.” NBC News. Retrieved from https://www.nbcnews.com/business/business-news/look-why-quibi-failed-so-soon-after-launching-n1244312
[iii] Bursztynsky, Jessica. Oct 2020. “Quibi’s Founder and CEO Explain What Went Wrong.” CNBC. Retreived from https://www.cnbc.com/2020/10/22/quibi-co-founders-katzenberg-whitman-explain-what-went-wrong.html
[iv] Watson, Amy. “Uptick in streaming services consumption due to the coronavirus U.S. 2020.” Mar 2020. Hub Entertainment Research. Retrieved from https://nscreenmedia.com/social-distancing-tv-viewing-impact-huge/
[v] Framke, Caroline. Oct 2020. “RIP Quibi, a Mess that had More Talent Than It Knew What to Do With.” Variety. Retrieved from https://variety.com/2020/tv/news/quibi-canceled-shows-1234813479/
[vi] Alexander, Julia. Oct 2020. “11 Reasons why Quibi Crashed and Burned in Less than a Year.” The Verge. Retrieved from https://www.theverge.com/2020/10/22/21528404/quibi-shut-down-cost-subscribers-content-tv-movies-katzenberg-whitman-tiktok-netflix
[vii] Lawler, Kelly. Oct 2020. “Quibi Shuts Down Aftere Six Months: Of Course it Failed.” USA Today. Retrieved from https://www.usatoday.com/story/entertainment/tv/2020/10/22/quibi-shuts-down-after-six-months-heres-why/3725358001/
[viii] Mullin, Benjamin; Flint, Joe; Farrell, Maureen. Oct 2020. “Quibi is Shutting Down Barely Six Months After Going Live.” The Wall Street Journal. Retrieved from https://www.wsj.com/articles/quibi-weighs-shutting-down-as-problems-mount-11603301946
[ix] Framke, Caroline. Oct 2020. “RIP Quibi, a Mess that had More Talent Than It Knew What to Do With.” Variety. Retrieved from https://variety.com/2020/tv/news/quibi-canceled-shows-1234813479/
[x] Garcia-Hodges, Ahiza. Oct 2020. “A Look at Why Quibi Failed so Soon After Launching.” NBC News. Retrieved from https://www.nbcnews.com/business/business-news/look-why-quibi-failed-so-soon-after-launching-n1244312
[xi] Lawler, Kelly. Oct 2020. “Quibi Shuts Down Aftere Six Months: Of Course it Failed.” USA Today. Retrieved from https://www.usatoday.com/story/entertainment/tv/2020/10/22/quibi-shuts-down-after-six-months-heres-why/3725358001/