Bolder Thinking Blog

Quibi’s ill-timed launch adds to the new streamer’s challenges

May 21st, 2020 | Emily Groch

Just because we are stuck at home, leaving only for essential activities doesn’t mean that our human drive for experiences disappears. Because we cannot physically engage with others, we’ve looked to recreate or invent new social experiences online. We’ve tried valiantly to replace in-person get-togethers with Zoom meetings (although many have found these to be poor imitations of the real thing). We’ve increased our time on social media, many of us engaging in these spaces more than ever, and finding new ways to connect with strangers (TikTok, anyone?), as well as with friends and family. Netflix agilely launched the Chrome extension Netflix Party, as consumers looked for ways to watch content “together” with friends, even while apart. We are social creatures, and as Mintel explores in its trend drive “Experiences,” the human desire for experiences is resilient. That Quibi, a platform built to offer siloed viewing for the individual on the go, launched with no alterations or acknowledgement of the current state of affairs has hindered its potential success.

The challenge of the white space

This is not to say that Quibi’s business model wouldn’t have had challenges even without the poorly timed launch. Quibi is targeting Millennials and Gen Z, as these consumers are watching the most mobile video on the go. Plus, they are least bothered by ads on streaming sites. However, these consumers of short-form, mobile-only, ad-supported content are watching that content for free. According to Mintel research on digital video, more than half of Millennials watch free videos online daily. And 64% of 18-24 year-olds use free streaming services such as YouTube or Vimeo. Quibi’s creators have argued that they have found a white space – high-quality, short-form, mobile-only content – and they are filling it. However, since I first heard of this service and its business model, I have been skeptical about the YouTube Generation’s or its successors’ willingness to pay for short-form, mobile video. The cheapest Quibi option is $4.99/mo., and it still includes ads. Sometimes you have to ask whether the white space is there not because it needs to be filled, but because there is no demand for such a product.

Proving quality

Quibi’s creators banked on the idea that their content is high-quality. We’ve seen it all over the marketing efforts since before launch—Quibi seemed to try to justify the cost before consumers started resisting the price. Big-name celebrities pepper the content available in the app as if to say, ‘Hey, it really is worth paying a monthly subscription fee for short-form content, with ads, on your phone!’ Quibi also sought to get users hooked on the content by offering a free 90-day trial—three months to prove that its content is great before the customer would have to start paying.

Of course, even with the free trial, most users haven’t stuck around for their full 90 days. Cordcuttersnews.com reported that despite more than 3 million downloads, Quibi has only 1.3 million active users.

The Pandemic

Certainly, the lack of demand for Quibi has been exacerbated by the COVID-19 crisis. The moments for which the service was originally intended are gone—many are not commuting on public transportation, we’re not spending much time standing in lines, and most of us aren’t waiting for friends to show up at the restaurant/theater/concert venue. But Quibi’s creators argued that there are still “in-between” moments at home, focused on the original vision of the mobile quick bite. They launched the service anyway, without stopping to consider how consumers are actually engaging with content during social isolation. It turns out that when we socially isolate, we more desperately want to connect.

Quibi’s focus on a solo experience for on-the-go consumers was glaringly out of step with most Americans’ current reality. The service failed to enable social sharing by blocking screenshots from the app, and there was no way to cast content to a TV, which is how many of us are sharing experiences with our families and housemates during this time.

It’s extremely difficult not to contrast Quibi with TikTok, a mobile-only, short-form video/social app that has seen usage explode during the pandemic. In a recent interview, Quibi co-founder and industry veteran Jeffrey Katzenberg called the comparison between Quibi and TikTok like “comparing apples to submarines.” It’s very true – TikTok is about creating shared experiences online, and Quibi is decidedly anti-social.

But I should say was decidedly anti-social. Quibi has made some changes since the early waves of criticism rolled in upon launch: iPhone users can now stream Quibi on their TVs, and some content is shareable on social media outside the app. Unfortunately, it may be too little too late.

Re-assessing

Comperemedia observed Quibi’s digital advertising and national TV ad spend drop sharply after launch week, perhaps as it reassesses its approach. According to the New York Times, Quibi is moving away from ads that promote the service itself, toward promoting specific content to targeted audiences. Comperemedia has observed this shift only in Quibi’s TV advertising, so far. Although Quibi’s marketing spend remains depressed in May, we’ve observed the brand leaning into its series Reno 911 on national TV, with the bulk of ad spend against animated entertainment for adults.

Online, Quibi continues to utilize Facebook to target ads for specific shows to specific audiences (an approach it began pre-launch). According to Mintel/Pathmatics, Quibi has shifted spending away from higher-CPM video ads to concentrate solely on display and Facebook ads. What remains most striking is Quibi’s very low marketing spend in May. Perhaps it is preserving its budgets for the days when we can all interact in the world in more “normal” ways, and its service can be used as originally intended. Unfortunately, it could be waiting a very long time for that.

Emily Groch

Emily Groch

Emily Groch is Comperemedia’s Director of Insights, Telecommunications, providing omni-channel marketing analysis and competitive insights to telecom providers.