Before Jeffrey Katzenberg’s shortform TV project Quibi finally launched this week, leading brands had bought into the Dreamworks founder’s dream. It shifted one year's worth of North American ad inventory ($150m) before the public had even appraised the platform, but will audiences be as impressed with the so-called ‘next generation of content’?
Katzenberg has hedged $1.75bn of funding on his instinct that there is demand for a mobile-first streaming service with ‘quick bite’ storytelling. Talent like Christoph Waltz, Liam Hemsworth, Idris Elba, LeBron James, Sophie Turner and Will Arnett are among those leading some 50 exclusive shows on launch.
There's a mix of scripted and unscripted gems from the depths of Hollywood, across a broad spectrum of genre and appeal. TMZ gossip sits alongside BBC News reports and among the expected dramas and high-concept vehicles are some unconventional launches. Tituss Burgess has people eat exploded food in Dishmantled, nature documentary meets reality TV-pacing in Fierce Queens, and there’s Gayme Show, a gay game show aping the reality TV tension of Ru Paul's Drag Race.
Around three hours of cumulative content will appear daily, with each Quibi lasting up to ten minutes. The aim is to have 175 shows available by the year’s end.
These are available to most mobile users; the app is on Android and iOS in most territories and isn't beholden to the legacy rights concerns that the likes of Netflix face on a region-by-region basis.
What does the consumer get?
Jamie McGowan Stuart, a research analyst at Enders, is impressed with the design of the app and, in particular, its Turnstyle tech which optimises content for both vertical and horizontal viewing. But it is not perfect. “The inability to multitask could be a problem for on-the-go users, if they can’t keep audio playing when they have to switch between apps.”
Many will make the mistake of comparing Quibi to Netflix or an Amazon Prime Video. Instead it is largely competing against mobile-first content, which is typically user-generated. As McGowan Stuart puts it, “it’s big-budget, traditional programming but in a mobile-only context. It’s not competing for the television set.”
Quibi describes itself as perfect viewing for anything between “coffee time, a daily skincare routine, or even bathroom breaks”. As such, it is more likely to be competing with TikTok, YouTube, Instagram and Snapchat TV.
It takes time to build a customer base. The lockdown has millions hungry for content. But the app, designed for busy people on-the-go, might find that the lockdown prevents these habits from forming in the short-term.
Quibi is being shipped with 90-day free trials to hook users. It has a "huge" marketing campaign behind it (most of its trailers on YouTube have secured millions of views). And in North America, where T-Mobile users get a free year, on-the-go streaming is very much in a carrier's ballpark.
He concludes: “Whether users stick is another matter. Being new and mobile-first might be its differentiator for the moment, but without hits that could ultimately count for little.”
What marketers need to know
Liam Brennan, global director of innovation at Mediacom Blink, has been playing with the app for the last 24 hours.
He says it is “more Instagram than Netflix." It is easy to navigate, and users can bookmark their favourite shows – if they can find one.
“At the moment it really lacks a buzzworthy show like a House of Cards, The Mandalorian or The Man in the High Castle to bring people in. It isn’t something I would pay $7.99 a month for.”
Brennan’s also worried that its mobile selling point might be a hindrance. “Its biggest flaw is its lack of a TV-sharing option. It is limiting opportunities within the living room where most streaming typically takes place.”
In the US, the service costs $4.99 a month with ads, or $7.99 without. On offer are six, 10 or 15-second pre-roll spots before the Quibi content streams. These are unskippable but only total 2.5 mins per hour; Katzenberg claims this is about 14% of what you’d see on typical TV in the US. It is yet to serve ads to international audiences – likely due to ad sales priorities than anything else. As a result the UK only has one tier available, at £7.99 a month.
In North America, Discover, General Mills, T-Mobile, Taco Bell, Procter & Gamble, PepsiCo, ABInBev, Walmart, Progressive and Google were among the first brands to invest into that $150m pot. The project has no issues drawing in digital spend from the biggest brands. They can expand ad spend internationally as required.
While legacy broadcast streaming operations like Hulu or Peacock offer a tiered system, a higher fee equals more, or more premium, content. Quibi is going in a different direction – their tiered system means consumers can have $3 off their monthly cost if they opt into ads. Netflix has often been linked with talks of advertising to offset its huge production and marketing costs. Brennan wonders if this will set a precedent for other services to follow, or whether the model will prove unsustainable in the long-run.
“Much of the ad-supported video market is free to users – take the Roku Channel which launched in the UK today as an example. It believes that there's room for free viewing below paid.“
Regardless, there is a no doubt that a huge opportunity in this space exists. Amazon Prime Video, Netflix and Disney+ have been pulling audiences from elsewhere – but have no ad-products, and advertisers have been looking for an AVOD provider to fill this gap and help them reach streaming-only audience segments.
Brennan concludes: “Given that most streaming services are not ad-supported, Quibi provides a great opportunity for brands to reach a scaled audience in a new viewing environment and potentially improve costs.”