In memory of the death of Quibi, here’s a quick sendoff from four of our writers who came together to discuss what we can learn from Quibi’s amazing, instantaneous, billions-of-dollars failure.
Lucas Matney looks at what the potential was for Quibi and how it missed the mark in media. Danny Crichton discusses why billions of dollars in VC funding isn’t enough in competitive markets like video. Anthony Ha discusses the crazy context of Quibi and our interview with the company earlier this year. And Brian Heater looks at why constraints are not benefits in new products.
Lucas Matney: A deadpool company before it was even launched
There will be dozens of post-mortems on Quibi, but the fact is there were dozens of post-mortems written about Quibi before it even launched. The whole idea was, to be kind, audacious, though it was also clear to most people that weren’t personal friends with founder Jeffrey Katzenberg that it was doomed from the start.
Quibi’s death is an important moment for streaming, largely because it’s a pretty strong rebuke of services trying to one-up the Netflix model by solely focusing on high-dollar original content. I think Quibi made several mistakes, but its most pertinent ones can be tied to a lack of flexibility in vision.
The startup insisted that all of its titles were mobile-only, high-production value and relying on Hollywood star power when they probably could have succeeded by keeping a closer eye on what kind of quick-bite content was succeeding elsewhere. Snap has seen success with Discover after years of attempts, and there is space for a dedicated player here, but Katzenberg tried to level-up by throwing checks at his friends and not doing the hard work of scouting out rising trendsetters in the creator world.
There are other lessons here that apply to other streaming new-comers like Apple. Namely that creating a hit TV show is hard and buying a hit TV series is easier if you already have the money. Quibi and Apple TV+ both launched with plenty of new series and no back libraries of beloved legacy content for users to spend time digging into. There’s just so much good stuff out there already. Apple has shifted strategy here, but Quibi boxed itself in and probably couldn’t afford to play here once its error was made clear.
Quibi showcases how the streaming wars’ upending of Hollywood has probably eclipsed reason at this point. Players like Apple don’t belong here, and there’s just too much money pouring into original content that loosely fits the Hollywood mold.
Netflix stock is down 7% today after earnings yesterday showcased slowing growth. With HBO Max, Disney+, Peacock and Apple TV+ all launching in the last 12 months, the streaming market’s cup runneth over. And while I don’t think a Quibi death spells the end for innovation here, I think that the market is ready for some 2021 consolidation.
Danny Crichton: The Big Bang Theory of media doesn’t work
It’s easy to snicker at the Quibi saga — it’s basically the WeWork saga compressed into, well, a quick bite for busy millennials. Yet, it’s also a tale of just how hard it can be to compete in markets like media.
I wrote a story on TechCrunch back in 2015 called “You Need To Be A Billion Just To Make A Million” (I’ve since learned how to write headlines). Focusing on e-commerce upstart Jet.com and its founder Marc Lore, the essential thesis was that in markets like e-commerce, the first step to even getting a shot at competing against incumbents like Amazon is that you have to raise prodigious funding and go absolutely massive.
That model is in direct opposition to the more typical startup story we talk about around “lean” growth that emphasizes cheapness, fast user feedback and iteration, and careful scaling based on product-market fit.
Quibi entered the most competitive market today on the internet: the video content business. It’s competing for user attention from premium streaming companies like Netflix, to incumbent media companies like NBC and its Peacock service, to content library holders like Disney and Disney+, to large tech companies with so much cash to burn they don’t know where to put it like Apple and Apple TV+, to ad-driven video upload sites like YouTube.
With so much competition, the only choice to reach the big leagues in no time at all is to spend billions of dollars as quickly as possible and hope you have built enough sails to catch the wind just in time. Quibi never did. And so it turned its billions into millions into zeroes.
What’s interesting though is that media has almost always been impervious to massive investments to gain market traction for brand new products and formats. Netflix grew assiduously over decades. YouTube and Twitch offered unique products that iterated as they reached scale. TikTok, despite its incredible success recently, was built on years of iteration across other products in ByteDance’s lineup that finally congealed into the app we see today.
That iterative approach is slow, boring and, ultimately, effective. The Big Bang Theory that we see so often in media is flashy, exciting, newsworthy — and seems to fail every single time. It’s time to stop the publicity shoots and the multi-hundred-million dollar ad buys, and get back to building unique, differentiated experiences and prepare for the long haul.
Anthony Ha: $100,000 a minute wasn’t enough
Reading reports about Quibi’s demise, I kept thinking about something that CEO Meg Whitman told TechCrunch’s Sarah Perez at the beginning of the year, as the company was doing its big push at CES.
When Sarah asked how Quibi (a paid subscription service) was going to compete for attention against free video platforms like YouTube, Whitman replied that YouTube is “the most ubiquitous, democratized, incredibly creative platform, but they make content for hundreds of dollars of minutes.” Contrast that with Quibi: “We make it for $100,000 a minute.”
That quote seemed to encapsulate something about the way Whitman and founder Jeffrey Katzenberg thought. I’m not saying that production value doesn’t matter, but the idea that spending a lot of money would guarantee success seemed pretty telling, even then — and it felt suspiciously like the mindset of old-school executives determined to show those crazy internet kids that what they wanted was some Hollywood razzle-dazzle.
Maybe if Quibi had launched with some genuinely top-notch shows, it could have worked. Yes, the platform enlisted plenty of high-profile filmmakers, but it was hard to escape the feeling that A-list creators were offering the service their B-level (or C-level) ideas. At launch, I wrote that the initial line-up consisted of “well-produced, moderately entertaining shows” that were “fine, but rarely more than that.”
What Quibi needed, if it was going to launch in a crowded streaming marketplace, was a breakout hit — and it never found one.
Can you blame the company’s struggles on the pandemic, as Katzenberg did? Sure. An on-the-go video service seems redundant in a stay-at-home world. And with production largely halted, Quibi never got the chance to create new programming that incorporated any learnings from its disappointing launch.
But Quibi’s story may also illustrate a more evergreen truth: That all the money in the world can’t turn a turkey into a hit.
Brian Heater: You can’t buy a battering ram
Quibi was a service defined by its limitations. Six-minute video chunks, vertical orientation, mobile-only viewing. For Katzenberg and company, these were not packaged as strikes against the service, but rather selling points in a “mobile first” world. Added to these were parameters set by old media executives attempting to apply old media principles to a new media platform. The lack of screenshots didn’t single-handedly kill Quibi, but the service cutting off its nose to spite its face hobbled any hope it had of true, organic social media growth.
Instead, the service was an attempt for executives to buy their way into an overcrowded media landscape with a battering ram of venture capital. But a programming slate that appeared to have been generated via malfunctioning algorithm or Madlibs wasn’t going to differentiate it from a million other streaming services currently vying for our hard-earned $8 to $15 a month.
Katzenberg blamed COVID-19 for the surface’s failures out of the gate, but if you can’t sell programming to a captive audience starved for new content, it’s probably time to rethink your strategy.
Quibi slowly attempted to reverse course by introducing “new features” that simply aligned its offering with existing services. But by then it was clear that even a $1.75 billion runway wasn’t enough to save this runaway train.