Jeffrey Katzenberg, Meg Whitman Share Their Plan to Shake Up Mobile Media

and former Hewlert Packard CEO Meg Whitman. My conversation with them was recorded from the stage of the Innovate Summit in Los Angeles on December five. I hope you enjoy. For those who have been under a rock this past year or so, let's get the elevator pitch out on what you guys have been working on. Uh, talk about the state of Quimby. Yeah. Well, first of all, thank

you for having us this morning. We're delighted to be here. Um. So we are building the first entertainment platform built mobile only for quick bite meaning short form under ten minutes quick bite content made by Hollywood's top creators. And uh, we have really been in business we raised our initial funding ground which we closed on July thirty one, So we've been in business effectively since August one. And uh, we are commissioning content, we are building the tech platform.

We are hiring people. I think today we're at forty eight people, up from five on August one, and um, we are super excited about the opportunity that lies ahead. The name is a contraction of quick bites, which is what we have called this content for a long period of time. And so it's a contraction of quick bites. And people seem to like Quimby. You know, it's memorable, It rolls off people's tongue. It says what we do. And uh, so we're we're off and running and we're

excited about it. And what is the roadmap ahead? You guys are developing stuff. You have some interesting projects that you're starting to announce. Uh, Jeffrey, what do you what do you see the next twelve months looking like for Quimby? Well, I think it's a it's a lot of things, and you know, I think may can expand on a good

part of it. Um. But from a content standpoint, UM, we have to achieve two essential things for this to be successful one which is, as we have discussed, UM raised the quality to an unprecedented level, and which is make said we bring the very best quality, production, talent, financial resources UM to UM. Uh. You know what has been this world of UM. You know, pretty amazing work

that's gone on on YouTube, Facebook, Instagram, snapchat. UM. But we're looking to do something at a pretty high level. And we can talk a little bit and give you a good and allergy about that. But at the same time, we also have to achieve a phenomenal volume of content. So just to put in perspective, once we go live, we will deliver in the first twelve months five thousand quick bites. So it's a it's a high bar. So on the content side, it's building the team out. Remember

we don't produce anything. We commission our content. We are a licensor of content from everybody in the production Hollywood ecosystem. UH, you know, at the highest ends of it. UM. But at the same time, UH, we have to build UM a user experience UM in the way in which this unique content is consumed in an equally unique way. And so in the world of product, which is how people are actually going to experience and be served up our content.

Mega's put together a world class engineering team and product development team, and that bar for us is as essential and as high UM. So there's there's a lot of things to get on our to do list. Do you guys at this point know when you're going to be in market, So either the last part of or the first quarter probably, and it just depends on what's going on in the marketplace and how ready we are. We have one chance to launch, and we needed to be as absolutely close to perfect as it can possibly be

from a content perspective and engineering perspective. So we'll see from the biggest challenge and we know this right now, is the volume of content to you know, to hit this quality that we want and the quantity UM. It's a tall order to deliver that in the next twelve months, but that doesn't mean we're not going to try. UM So we're giving ourselves a lot of flexibility where we're not going to get locked into something. As Meg said, when we come we have to hit a home run.

I think what people sometimes forget is this is the first UM platform that has ever been launched without a library. There's no library to buy because no one has done this quality content in this format, and so every bit of content has to be made de novo with our with our partners. And it's the format question I want to dig into first, because you guys are are It's not that short form content doesn't exist, but you're doing it at a level that I don't think it's existed

at volume. So when you're out there talking to the creative community, how do you even pitch this? Are they even thinking in five ten minute bites? Well, here's the I think. I think that's where and that's why we are trying to UM move ourselves into something where we're not in the short form business. It's why we sort of are embracing this idea of quick bites. And let

me try and put that into context. UM. For for us, a lighthouse show is um a two to three hour story that you can actually consume in bites that are under ten minutes. UM. This is the convergence of two very try, true, tested and phenomenally successful existing forms of

um UH filmed media. So what does that mean? So for the beginning, at the the beginning of the twentieth century, UH, we pioneered out on this path our industry and we made movies, and they quickly migrated into storytelling that is two to three hours in length, and that has worked and continues to this to the to today to be

a widely accepted form of narrative film storytelling. In the middle of the twentieth century, television came along, and now we found a new form of narrative storytelling which posibly, not exclusively, but principally is in one hour chunks, and was formed and formatted to fit into broadcast television. And so for seventy years, uh many of the greatest talents and showrunners creators have been delivering their stories in chapters.

We call them act breaks. In this town. The first act of this is US is eight and a half minutes. There's then a break, and there are five of them, and then they deliver a forty two minutes show. And it's not you know, forty one forty one week and forty two ten the next week. In it it's to the second forty two minutes. And so this idea that we're contracting together these two tried, true, tested, you know sciences, which it's a it's a proven science with a new

application to it. The example which I've given to you before and you've actually written about before. Is what happened in publishing where Dan Brown just he was the one that just made the greatest impression on me. Is neither the first nor the only to do it. It's just the one that really, you know, landed for me. Is he wrote the Da Vinci Codes FO sixty four pages long and the has a hundred and five chapters. The average chapter is less than five minutes. So I get it.

By innovating in terms of the increments of content, you guys are going to do something that feels more conducive to the mobile experience as opposed to TV or film. But is it possible that what mobile is about is giving people the ability not to consume these new shorter increments, but to go through films and TVs at their own pace, stopping and starting at their own leisure. So I think one of the things to consider is, remember Jeffrey said, we are not a studio, so we don't make any

of our own content. But the other thing people often forget is this is a very different use case. This is on the go viewing. So you leave your house Dray morning with a little TV in your pocket. It's called your smartphone. And during the day, think about it. You have these in between moments ten minutes here, five minutes here, fifteen minutes there where you want to see something great. And whether it's waiting in line at Starbucks or waiting for a meeting to start, or waiting for

friends for lunch, or at a doctor's office. And so it's a very different use case, and people are looking for things that are of a you know, something that's really like a gem for that little moment in time. And again, Jeffrey said it. YouTube has done a fantastic job. It is the most democratized video platform in the world. But what we want to do is a little bit the analogy of what HBO did when they launched. HBO

launched at the height of advertiser supported TV. And remember what their tagline was, We're not TV where Hbo and so we're not short form you know, YouTube, Snapchat, Instagram, we're quimby and so it will be that much of a step up in the quality and storytelling. And think of the four things that HBO did. They eliminated commercials, they freed the form and formats they were not behold in the thirty sixty all right, so so far check

those new boxes for us. Third is they were not beholding the standards and practices, so they could make any content. You could have sex in the city, you could have sopranos, you have the wire in this. And third they they spent UH at a level of production that an AD supported world simply could not compete with. So they ordered ten episodes a Band of Brothers for a million dollars. You translate that to today, that's like thirty million dollars in episode. So we check all of those four boxes

when we say we're not short form, we're Quimby. And so to bring that kind of quality of production and talent UH to this um, you know, I just think it is a singularly and and and unique experience to anything that's there today. But you guys are going to, you know, hopefully be the brand for the way this

new format is known. What I'm wondering though, is is it less realistic to expect people to have a Quimby app on their phone for this kind of experience as opposed to fishing, where the fish are having Quimby live on the platforms where consumption is already taking place. Going to the Facebook Acto into snap Jacko on the Instagram. Why go it alone via your own branded app, because we want to. First of all, we think we can get the distribution and the go to market through our

own content. I mean, we are making content with incredible actors, actresses, directors, producers and wonderful story Second, we will do distribution with some of the big tailcos, whether it's a Verizon or an A T and T. But importantly we're going to do something quite different with the tech platform here. And one of the things Jeffrey and are trying to do is to bring the best to Silicon Valley together with

the best of Hollywood. So Jeffrey said it. But the user experience, the search and fine metaphor, the recommendation engine, how content looks on mobile needs to be completely upgraded and different today. I think you know, listen, lots of people watch mobile on their video. In fact, they're watching over sixty minutes. Our target audience of five year olds is watching about an hour a day. But it's not

an optimized experience. Here's a great analogy for you. Think about what Apple and Samsung have done for photography on the mobile phone. It's remarkable. I mean, I take pictures, I feel like I'm a junior only any Leibowitz. I mean, it's amazing how good those devices have made all of us look as photographers, we want to work to have video look that good on the mobile, and there's all kinds of challenges with that, as you can imagine, right.

But with the thing that strikes me then is you have two massive challenges in the sense of you've got to ramp up this new content format format at both quantity and quality, and the experience of watching that content is something that you just described as being quite a challenge. You know, we're here at the Innovade conference, we're talking about machine learning, artificial intelligence. Are you bringing those kind of technologies to bear here? Sure. So there's a couple

of things. One is, remember we have to have a different search and find metaphor, and we have to have different personalization that exists today. I'll just give you a perfect example. As many of you know, it takes about eight minutes to find what you're looking for on Netflix. This cannot take eight minutes because the viewing window is ten minutes. So we almost have to know what you want to watch before you know you want to watch it.

And so the good news is every piece of film that is on our platform is only there because we say it's there. It's highly curated, and everything will have a script. So think about we can apply meta tagging to every single frame, which allows behavioral analytics and AI to be much more accurate and predictive than it is if you are retrofitting lots of you know, older movies or older TV shows, it's harder to actually meta tag to the level that we're going to do it. The

second is we have to instrument this site. And this is one of the great joys of being a technologist. I kept to build a tech platform with no legacy, which you know, if you've been in business for more than five years, you have a legacy tech platform. Maybe have a legacy tech platform at variety, I don't know,

and uh. And so we will be able to instrument this where we have data on usage patterns, on watching, on what works, what doesn't, and we will be filtering that into our recommendation engine, our choice of what content to make, and things like that. So this ought to be state of the art from an AI, behavioral analytics, machine learning. But then let's go back to the art of it all. You know, you're both out there and the creative community talking to people. Uh do they get it?

Do they do you give them the vision of how ten minutes storytelling works? Or or has there just been this long suppressed out there. I've been dying to tell this ten minutes story. Um, well again, I'm gonna keep coming back and saying to you, we're not asking people to tell ten minutes stories. We're actually asking them to tell two to four hour stories increments of ten. Okay, Well,

there's a huge difference in that. Sorry, I and I And so the answer is is that the challenge, the excitement, the enthusi yasm, the opportunity to be pioneering and innovative is something that has gotten people enthusiastic and our industry in a way that I have to say, is kind of the wind beneath our wings right now. It's everybody wants to play. And I would say when I say everybody wants to play, I mean you look at the lineup of people we've already announced. You know, Anton Fuqua

was out there actually shooting tests for us right now. Um, we have a new project. Katherine Hardwick, Um, you know who one of our leading amazing directors female directors today.

She just committed to do a uh a new project with us, UM and I should make sure I say it all right here, which is how they made her UM, which was written by Jeff Leeber and Charlie McDowell McDonald UM, which is a really kind of fascinating story UM around a AI character, a real thriller, and she is actually out now shooting some tests uh for us as we speak.

Um uh. But everyone from Anton Fuqua to uh uh, Giermo del Toro to um you know uh uh, you know, it's just it's been a there's so many names, Sam Rainy Uh. It's it's a good way. Lena Waite is doing this. Everybody's exciting. And by the way they're all pioneering. It's like we're not giving them some tight little box and asking them to, you know, to produce. We're actually just giving them sort of guardrails and saying experiment, you know, discover the path forward for us in it, and some

insight about how these stories can be shot. So it looks better on mobile. So I don't most of you probably have watched some things on your mobile and it often looks quite dark, doesn't it. Well, that's because the actual shows need to be shot with more contrast to begin with. Right and then and when you're on mobile, you go from this environment which is quite dark, to right outside in the lobby to outside on the sidewalk, and you're changing light environments and it becomes increasingly more

difficult or easier to watch the video. So there's visual optimization that we need to be able to do. And one of the things that we've been able to do. We have a test of this is you know when you go to if you have Apple phones, you go to that brightness slider in the your settings. Well, we now have moved that into the app where you can just use your fingers to change the brightness while you are in app, So as you move from spot to spot, you're not exiting the app going to settings, changing it

and coming back. Which was not a problem that you carried your flat screen TV from here to the lobby to out on the street. No one had to worry about that. We do, you know, and so making that great. You know, the other thing that you talked about, uh and he is is um you know, why not be in the environment, you know, where the fish are, and the fact is where the fish are right now today. UM, as Meg said, is a phenomenal, phenomen amal environment, but

it is an ocean. And the fact is is that we need to find a place where it's a premium experience. And we have seen this occur in other businesses UM and other related businesses. Meg made the note, which is HBO. When television was at the height of three TV over the air at its height, HBO came along and you know, launched a premium service, UM Spotify, Spotify and Apple Music. Six years ago, all music was available, thirty five million titles. All you had to do was type in the title

and you could have any song that you wanted. Well, what did they did? They came along and they created playlists, recommendations, a set of features that suddenly made music curation convenient. And somebody did the workforce and by the end of this month, six years, two hundred million people paying ten dollars a month for the exact same music that they had before. We need to make information convenient, which is

a very big part of what we're doing. We talk about the lighthouse all the time, but the sort of second part of what we're doing is taking what is right now ubiquitously available information around video and curating it in a quality way and now making that convenient for people every day, which is why we are a daily We are a Monday through Friday, eight in the morning till six o'clock or eight o'clock at night. That's our

use case. That's not where television. I would ask in this room anybody in this room who has watched a our episode of television between eight o'clock in the morning and six o'clock at night, and you watched it on this device, could you please raise your hand now? And Andy has one? I found there's one. Okay, well one. I'm not sure your boss will be really happy with you. Um, but so that but you understand, that's not where we

watch quality of media today. And because we don't have an hour, there's not a single person in this room that doesn't have five or seven or ten minutes in the course of your day, ten times a day. Particularly our target audience five year old target audience is on their mobile phone four to five hours a day. Interestingly, the average session length is about six and a half to seven minutes. So think about how many times they're picking up putting down their phone for relatively short bits

of time. We want to fill some of that time. You know, you're getting backing from really the who's who of the Hollywood studios, the biggest companies. I'm curious is there going to be much coordination with them in terms of the kinds of intellectual property that we can see show up in Quimby, so that you're able to sort of leverage existing intellectual property that is on the NBC's, that is on the Disneys, that is on the Foxes.

Or is this going to be just sort of a world of intellectual property unto itself it is what they

are participating. Well, there are investors, there are partners, the as you I mean, just to put this in perspective, this is the first time in the history of our industry in this town in which everybody and I mean everybody, every single media company has come in and been an investor um and help start this business up and committed to make their talent and their i P available to help build out this platform and for them actually get

paid great value for doing that. It's a two way street here in this which is we're not asking for charity from anybody. We're not asking for people to work for less or non competitive, in fact, just the opposite. Our deal is actually one of the most tracted deals that anybody could work in in television or film today. Describe what makes it attractive. So, um, we pay a of the cost of our shows plus a margin, so a d and if it's long form, up to six

million dollars an hour. So that's the top of scripted television today. There are literally not ten shows out of five hundred and fifty that spend more than six million dollars an hour. Um, we have a license where that content, for in its short form and it's quick bites, is exclusive to us for seven years. At the end of seven years, it reverts to the producer. Then you own

it at the end of seven years. So one, it's going back to a model that worked in the sixties and seventies and eighties, where producers, production companies and creatives owned their content, except we're give delivering it back to them you much shorter window. Second is is that after two years you can take that content in its quick bites and put it together in long form. Long form to us is defined by over twenty one minutes, you

own that and can monetize that after two years. So if somebody has made a two or three hour movie for us, which we've paid a d and of the cost of where you can't take an episode of Game of Thrones and cut it up into six ten minute pieces, if you actually created it in six ten minute pieces, you actually can put it together and it's a seamless

hour of content. Now after two years, you own that, and you can now go sell that in the marketplace, and I believe will create one of the most powerful syndication markets that we've had since existed in television at the height of TV syndication, which was in the eighties and nineties. So the value for the studios and the creators is signific again. And I get those attractive terms.

I'm wondering though, whether you guys are setting yourselves up for a long term hangover seven years from now when a lot of your IP vanishes. We don't think so at all. And and and we've made a conscious decision here to partner and to make this the most attractive place for creators and studios to come work today, so that we get the best. You get what you pay for in this town and everywhere else in life, and

we're gonna pay the best talent competitively, if not competitive. Plus, our bet what Meg and I are doing our investors is we're betting on the success of the platform. We are thrilled for the I P holders and creators to get full value out of that content. And by the way, it worked brilliantly in the sixties and seventies and eighties. You look at the alignment between broadcasters, which is before financial interest and syndication rules, suns said they weren't allowed

to have a financial interest in their content. The studios never owned their content by regulation, they were prohibited from doing that. Right, and yet the studios got rich, the creators got rich, and the networks became blockbuster platforms in it. And so whether it was Happy Days or Laverne and Shirley or A Wife I've Oh or Star Trek are on and on and on, you know, Simpsons, hundreds of

television shows. You know, we're tremendous, tremendous successes. We want to return for that and we think it will work, and we don't want to compete with our suppliers. And

I think what Jeffrey said is exactly right. That what we want to do is have the best content, the best artist, the best creators on the best platform with the best user experience and search and fine metaphor, which therefore drives more subscribers and advertising, which therefore allows us to reinvest back in the core of what will make this platform great. And we want the creators to feel that this is an incredible deal. Why would they not want to do this. Maybe we should be the first

choice of what they end. Our content, particularly our Lighthouse content, is going to get marketed by it because that's our subscriber acquisition. So every one of these Lighthouse series, and by the way, we were at least one every every other Monday, literally every other Monday, twenty six of them will be a Lighthouse. Every one of them. We have to market the way we would come from a world where we market the release of a movie, because we

have to make it that compelling. I grew up in an industry where there are two things that move the dial, fame and fortune. And here's the deal. If you have fame and you don't have fortune, you're not so happy. And the reverse is true, you got fortune and you don't have fame, you're not so happy. Quimby is going to deliver both fame and fortune to people that come partner and work for us. Meg, you didn't a really great tech platform. You the best. You did not grow

up in this industry. You grew up in the industry of building tech platforms. What has it been like dealing with content and art and things that aren't so easily controlled? But we think engineers are artists as well. I couldn't agree more. What is it? But um, so listen there, Um, there are an enormous differences between Silicon Valley and Hollywood. Um. I lived here before. I worked for Disney for four years, so I've lived in l A before. We have a

number of friends here. Um, but it's an entirely different um community. And I'll just give you my sort of executive summary of this. In many ways is Silicon Valley is a community of left brain engineers who are highly linear, logical, data driven people. And this town, largely in the creative community, is right brain storytellers, and um, in some ways embodied in Jeffrey and I and uh and so you know, merging those two is not for the faint of heart.

And my view is that actually, the two of us have got to do something that I never been done before, which is, you know, how do you have the most incredible users variance with the most amazing content in a way that the engineers and the creators don't kill each other? And uh and so far, and we're the first test case of that, which is we've been in business for a year. We are complete opposites in every fashion japer.

We laugh about it all the time in it, right we when we're a year, we haven't killed each other yet. So and you know the power of opposites it's if actually if they attract, it's you get one plus one equals eleven. And that's what's happened for us because I know what I know, and I know she knows what I don't know, and vice versa. I mean, we could

not do this without Jeffrey, right. So, but it's been fascinating because I really am I'm not an engineer by training, but I've been in technology for so long I think like an engineer. I'm highly left brain, highly analytical, and Jeffrey is a right brain storyteller. And so often when we're you know, arguing or deciding what we're gonna do.

You know, we come at things from completely different places, and when we are at our best, increasingly they one plus one equals you know, ten, and it's it's quite powerful. Discounted me. Well, that's that's that's kind of that's a left range. She discounts every it's a reality chick. I'm sort of the warrior and I'm the you know, I

don't know, let's think about that. So there's there, there's there's the dreamer and the warrior, and that's a different yin yang altogether, and the and the analyst and you know, but it's it's actually a very powerful partnership and quite a bit of fun. I mean, Jeffrey and I've known each other for thirty years and we worked together at Disney. I was on his board at DreamWorks when he took DW a public and uh then HP, where I was most recently, had a long term technology deal. Our technology

powered the Dreamwork studio. So we've known each other a long time, but you know, we had to sort of work it out because like day to day, you know, it's I mean I talked to Jeffrey eight times a day, so and I will remind you and again we are. Partnership that we had at HP is emblematic of this.

DreamWorks Animation was a technology and storytelling company. You know, we were in the state of the art creation of digital imaging UM and we couldn't do what we did without actually having the support in this case of HP and a couple of other technology partners. And that's what took me to Silicon Valley. And you know, DreamWorks Animation had a studio, you know, down the street from Meg with eight people at it, and we called our engineers

artists that DreamWorks always did well. I hope the two of you going to keep this as much as we do, keep this going. Best of luck and keep us posted on all things Quimby, Well, thank you very much for having us. Thank you. This has been another episode of Strictly Business. Tune in next week for another helping of scintillating conversation with media movers and shakers, and please make sure you subscribe to the podcast to hear future episodes.

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