Quibi CEO Meg Whitman, who is 67 days away from the launch of the company’s ambitious new streaming service, claimed that the company doesn’t really see the likes of Netflix, Hulu or Disney Plus as rivals.
Whitman, speaking Thursday at the 2020 Upfront Summit in Los Angeles, said that only 10% of viewing on those subscription VOD platforms takes place on a mobile phone and most of that is during primetime hours. By contrast, Quibi is designed for on-the-go viewing between 7 a.m. to 7 p.m. — with all of its content designed to be watched on a smartphone.
That said, “obviously we believe we compete for entertainment dollars” with a range of streaming services as well as other categories like games, she said. Quibi picked what Whitman called an “affordable price point” relative to other major streaming services: $4.99 monthly for the service with ads and $7.99 per month without ads. It’s scheduled to launch April 6.
The mobile-video streaming company, founded by media mogul Jeffrey Katzenberg, is an ambitious play — coming into the subscription-streaming game amid a frenzy of activity. “My job is to get the very best out of Jeffrey,” quipped Whitman, who was interviewed by Upfront Ventures managing partner Mark Suster.
Quibi (short for “quick bites”) is targeting consumers 18-34. While there is a wealth of free short-form content already available and watched by that audience, including on YouTube, Snapchat and TikTok, Quibi’s thesis is that it can gain traction with a premium product in the way that HBO succeeded by differentiating its programming from the free broadcast TV.
Everything on Quibi is made for mobile, with episodes of less than 10 minutes. “We will be the first streaming service that launches without a library because everything needs to be uniquely made for Quibi,” Whitman said. “You can’t take a 60-minute [episode] of ‘Game of Thrones’ and chop it up into 10-minute segments.”
Whitman said there are three types of content on the service: movies broken into “chapters”; unscripted short-form series; and Daily Essentials, covering news, sports, weather and talk shows. The company expects to launch with some 175 original series and 8,500 episodes in the first year, with plans to deliver three hours of new content daily. At launch, Quibi will have 50 original shows.
Quibi is investing in mobile content at levels commensurate with primetime TV shows. YouTube creators, she estimated, may spend between $500-$5,000 per minute of video. Quibi is spending up to $100,000 per minute, or $6 million per hour, on production budgets for its top-tier originals, plus a 20% profit margin to the creator. Creators and studios own the intellectual property, and they reclaim rights to the content after it’s licensed to Quibi for seven years. After two years, Quibi’s creator partners have the rights to “reassemble” the episodes into a single movie for distribution in another window.
“We have A-list Hollywood writers, directors and stars,” Whitman said of Quibi’s content pacts to date, calling out programming from Antoine Fuqua, Steven Spielberg and Reese Witherspoon. The Quibi mobile-specific platform, designed for both horizontal (landscape) and vertical (portrait) viewing, has “inspired creators” to explore new forms of storytelling, Whitman claimed.
Leading up to the April 6 launch, Quibi will be ramping up a “rolling thunder” marketing plan to raise awareness. “We have to build a brand — no one’s heard of Quibi — and we have to build the use case,” said Whitman.
The company initially raised $1 billion in funding and closed another $500 million earlier in January, which should bring it through its first year of operation. “We had to raise enough money to create, at launch, a completely immersive experience,” Whitman said.
Quibi announced last year that it sold out its first-year ad inventory with $150 million in commitments from advertisers including Google, P&G and PepsiCo. The company also recently inked a distribution deal with T-Mobile, which will be hyping Quibi’s launch.
Both of those things “de-risk” the Quibi business model as it comes out of the gate, Whitman said. “The telcos we’ve talked to think we’re the perfect use case for 5G.”
Quibi is a “tech/media company,” according to Whitman, noting that it has 70-80 engineers and 70-80 content staffers. “Tech has been at the forefront,” she said, adding that Quibi has applied for patents on technology developed for its mobile-video platform.
Down the road, Quibi is looking at doubling down in interactive programming that can take advantage of smartphone features including the camera, touchscreen, gyroscope, and GPS, Whitman said.
Asked what Quibi learned from the November launch of Disney Plus, Whitman said it showed that “streaming is mainstream… What you saw by their phenomenal success… is that this is a well-established consumer behavior.”
Last week, Quibi screened 11 shows at the Sundance Film Festival, and Whitman said she was struck by the fact that some of the audience found the content more compelling in vertical mode. Separately, in an interview with Variety at Sundance, Whitman apologized for her remarks at a company meeting in which she compared journalists to sexual predators in expressing frustration for leaks to the media. “I used an analogy that was inappropriate and just plain wrong,” she said in the interview.