Quibi is officially done only a few months after launching- this is what businesses should take away from it
It’s been less than 24 hours since Quibi decided to shut down, just six months after its launch, cementing itself as one of the biggest stumbles in media history. If you haven’t heard about this platform before now, you might be tempted to simply move on. But there are lessons in failures, and businesses can learn a lot from the mistakes Quibi made.
What is Quibi?
Quibi was a streaming platform that produced short-form content. Run by Jefferey Katzenberg (of Disney and DreamWorks) and Meg Whitman (of eBay and HP Enterprises), this streaming platform targeted a younger demographic and focused on delivering content in 10-minute or less chapters that they referred to as “quick bites.”
Before the platform even had a name, it had secured $1 billion in funding from major Hollywood film studios, TV companies, telecommunication companies, tech companies, banks, and more. It would go on to raise nearly $2 billion in funding in total.
With some of the best leaders in the business, the backing of big players, and significant capital, it seemed as if Quibi was set to redefine the entire media world. Instead, it will now be known as one of the biggest failures.
So, what exactly went wrong? Well, just about everything.
Why did Quibi fail?
At first glance, it’s odd that the tech world is so interested in the rise and fall of what is supposed to be a media company. Sure, media and tech go hand-in-hand these days, but the level of focus is unprecedented.
This is arguably Quibi’s biggest and first error. They saw themselves as a restyled media company, a modern version of the classic Hollywood studio, when in fact, their ambitious plans to change how, where, and when users consume content made them closer to a tech company. Sure, Quibi produced and owned content, but its core was innovating and creating technology that would transform media consumption.
This core issue, this fundamental misunderstanding of what type of company they were, is really the root of all of Quibi’s problems. While this might be the root problem, it wasn’t the only one. Quibi didn’t just fail for many reasons; it failed for all of them.
The list of achievements between Jeffery Katzenberg and Meg Whitman is endless. Katzenberg was instrumental to Disney animations’ success in the 1980s and 1990s, bringing to life some of its biggest classics such as Who Framed Roger Rabbit, Beauty and the Beast, the Little Mermaid, and The Lion King. He later founded DreamWorks, creating more success with the likes of Shrek and Kung Fu Panda.
Meg Whitman’s resume is just as impressive. She’s been an executive at the Walt Disney Company, DreamWorks, Procter &B Gamble, and Hasbro. She guided eBay as it grew from $4 million to $8 billion in revenue and later joined Hewlett-Packard to turn it around.
Together they seemed to strike the perfect balance. Katzenberg brought creativity while Whitman brought business and marketing savvy. Despite their achievements, it always felt out of place to have two people of their generation (Whitman is 64 and Katzenberg is 69), leading a company targeting the younger generation.
While it’s not impossible for older generations to have a pulse on the younger ones, it always felt disjointed to have two people at the helm of an innovative tech-media company that didn’t understand the content or the tech that the younger generation gravitates towards.
Whitman said to Vulture, “I’m not sure I’d classify myself as an entertainment enthusiast,” and stated her favorite TV show was about President Grant on the History Channel when asked about what content she watches. Katzenberg meanwhile still has his emails printed out, and according to Vulture, “In enthusing about what a show could mean for Quibi, Katzenberg would repeatedly invoke the same handful of musty touchstones — America’s Funniest Home Videos, Siskel and Ebert, and Jane Fonda’s exercise tapes. When Gal Gadot came to the offices and delivered an impassioned speech about wanting to elevate the voices of girls and women, Katzenberg wondered aloud whether she might become the new Jane Fonda and do a workout series for Quibi. (“Apparently, her face fell,” says a person briefed on the meeting.)”
They were, simply put, out of touch with the very generation they were targeting. They neither understood the type of content younger generations wanted to consume nor how they used technology.
Even the name itself, Quibi, contributed to its failure. It was just another example of how out of touch Katzenberg and Whitman were. Katzenberg first pitched Quibi as “NewTV”, and later wanted to call it “Omaskase” after the tasting menu at Nobu Malibu. These out of date and out of touch name suggestions were just a reflection of the leadership.
Ultimately, they landed on Quibi, which didn’t land well with the staff in the company. They apparently never sought the staff’s opinion and ignored criticism from them that it was unappealing and cringey. The name was repeatedly mocked, both internally and externally, but despite hiring mostly young professionals that made up their target market, Katzenberg and Whitman refused to listen.
Medium & Technology
Although pitched an innovative media studio, what set Quibi apart was its technology. It promised to reinvent TV by streaming high-quality content broken into small chunks. Katzenberg believed that users wanted to spend their spare downtime on the go- waiting in line for coffee or commuting on the bus- digesting small amounts of premium content. To fit this vision, content was broken down into 10-minute or less “chapters”, to create short bursts of media consumption, rather than the long-binge-able sessions Netflix had created or the traditional 30 minutes-to an hour session with commercial breaks that network and cable channels had long since established.
Quibi hoped to completely change how and where viewers consumed content, and to do that it hyped up its tech-innovation. Called Turnstyle, this technology allowed users to easily transition between landscape and portrait mode when watching on their phone. It was an innovative idea, one that truly had teeth, especially since it’s something other streaming giants like Netflix have often struggled with.
But the focus on this technology ultimately held Quibi back. To emphasis the novelty of this tech, Katzenberg made the decision that Quibi would only be available to stream on phones, cutting out all chances of attracting users that preferred, or at least wanted the option, of streaming on computers or TVs.
Although it hoped to change the way users viewed content with its technology, Quibi always viewed itself as a media company. That’s why it invested so heavily in content from the start. By securing funding from major studios, Quibi got access to some of the business’s biggest names. The news couldn’t stop talking about the slate of A-list actors, directors, and producers signed on to create content for Quibi.
Katzenberg knew quality original content was key to success. Netflix didn’t become big until it launched its Netflix Original series like House of Cards, and Orange is the New Black. Amazon had Transparent, Hulu had The Handmaid’s Tale, and Disney+ has taken off thanks to The Mandalorian.
Yet, despite the ungodly amount of money spent on A-list talent, the platform failed to have a single hit.
While they had talent on their roaster, the content they scored from them was often previously passed on by major players like HBO and Netflix already. Quibi became the go-to spot for content that everyone else had already deemed unworthy. They never landed anything to drew users in, and what they did have wasn’t good enough to keep them around. Added to that, many of the innovative tech features Quibi boasted actually turned users off. The short “quick bites” felt inconvenient rather than innovative. It hindered content creation rather than promoted it.
To add insult to injury, it turns out Quibi didn’t actually own most of the content it helped produce, killing any hopes of selling itself to another media company.
Despite branding itself as a media company, Quibi barely marketed its content at all. Most of its marketing focused on the platform and the tech innovations it offered, rather than the media on it. It seemed baffling to spend so much money on star talent then not promote it.
This is perhaps why Quibi always felt more like a tech company than a media one. Despite the millions of dollars the company spent on its content library, it always felt as if it came second to the platform itself. From the marketing to the way Katzenberg and Whitman talked about it, everything focused on how the tech and platform would transform media consumption rather than the media itself.
This led to a number of marketing blunders. Despite targeting younger demographics, Quibi placed ads during the Oscar’s and Super Bowl, which typically have older viewership. These costly ad placements were in vain, as 70% of respondents surveyed after these ad placements though Quibi was a food delivery service.
The company also failed to assess how social media would play into advertising efforts.
Social media has become the de factor watercooler in this era, yet Quibi’s tech prohibited screenshots, meaning it was significantly harder for users to talk about what they were watching on Quibi. It’s hard to land in Twitter’s trending section without being able to share meme-able moments or land fan-pages on Instagram without being able to share images from the shows easily. By the time they made changes to allow this, it was too late.
Quibi made it nearly impossible for their shows to land in the cultural conversation on the Internet. There was a fundamental disconnect between the platform’s marketing efforts and its target audience.
Not all of Quibi’s errors are its fault. The company was unfortunate to launch in April, just as COVID-19 started to shut down North America. Suddenly people were stuck at home, not moving about consuming content on the go as Quibi imagined.
People favored watching content on large screens like computers or TVs at home, while Quibi remained a mobile-only platform. Eventually, they opened up to TV, but the move felt too late and more like a defeat.
Katzenberg has been quoted saying, “I attribute everything that has gone wrong to coronavirus.” But other streaming companies surged during the stay-at-home orders. Instagram Live took off, mobile phone usage was up, and streaming services such as Netflix and Disney+ saw an increase in new subscribers. It felt like a lack of accountability on Quibi’s behalf to blame everything on the pandemic.
Streaming was originally touted as an alternative to cable. People started to “cut the cord” in surges. Yet, only a few later, streaming has already begun to feel like the new cable. There are endless streaming services out there now: Netflix, Hulu, HBO Max, Amazon Prime Video, Apple TV, Disney +, Peacock, ESPN+, and more.
Quibi had intense competition from the start. They sold their high-quality short-form content for the monthly cost of $4.99 (with ads) or $7.99 (without ads). These costs were lower than other platforms, but it felt like an unnecessary expense to users without any big draw shows.
Quibi did manage to be No. 3 in the App Store on its launch day, but it fell out of the 50 most downloaded free iPhone apps a week after it was released. Most of its 1.3 million active users were also from free trial memberships through partnerships with telecommunication companies. As the free trials dried up, so did its users. Despite its A-list roaster, lower cost, and innovative ideas, users simply did see it worth it.
Even though it lasted less than a year, Quibi still managed to find itself embroiled in a lawsuit. Video developer Eko filed a lawsuit alleging Quibi stole proprietary technology, namely the Turnstyle tech, after Eko demoed it to Quibi employees, including Katzenberg.
Quibi didn’t last long enough to see the lawsuit’s impact, but it’s hard to write it off. Eko boasts a well-connected board with Snap chairman Michael Lynton and even partnered with hedge fund Elliott Management to pay for the litigation. If the other errors hadn’t sunk Quibi, this lawsuit very well might have taken it down.
What Can Businesses Learn from Quibi’s failing?
Quibi’s list of missteps is long and comprehensive. Looking back now, it seems as if they were doomed to fail, despite its impressive funding. From a fundamental misunderstanding of its business to poor marketing executions, Quibi was always going to die. The pandemic might have brought it about quicker, but despite what Katzenberg believes, it’s not the sole cause of death. Quibi failed to realize that unique doesn’t always mean desirable.
So, what can businesses learn? No matter what industry you’re in, there are many lessons to take from Quibi’s failures.
-Understand what your target audience actually wants
-Make sure your marketing efforts are tailored towards your target audience
-Understand your business and industry
-Invest in market research ahead of time
-Listen to feedback both internally and externally
-Embrace and expand on current trends rather than fight against them
Quibi isn’t the first business to fail, and it won’t be the last. Companies should take this as a learning opportunity. Sometimes knowing what not to do is as valuable as knowing what to do.