Quibi Quibble

that time out at around ten minutes or less. The whole idea was to go after a relatively untapped market, people who have a little bit of time to kill, but who don't have the ability to sit down for a full half hour or longer and watch a movie or TV show. Quibi would go after folks who might be standing in line or otherwise doing next to nothing. It would really be the smartphone crowd. Quibi would help people fill in those short gaps of the day that

aren't really dedicated to something else. When Jeffrey Katzenberg first started working on the concept a couple of years before launch, it seemed like it could be a really big thing, a potential hit. But Quibi didn't count on COVID nineteen. I mean, to be fair, none of us did, and in fact, even when it was becoming more apparent, a lot of us were not giving it enough attention, and COVID nineteen would change the landscape dramatically, taking the legs

out from under Quibi before it could even launch. So today I'm going to talk about Quibi, how it went from idea to service, and how the era of COVID nineteen has really messed the business plan up for the company. But let's get into the history of Quibi. Our story starts with a famous media businessman, Jeffrey Katzenberg. He was born in New York City in nineteen fifty. He attended New York University for a year and then held a series of odd jobs before being hired on in the

mail room of Paramount Pictures. The CEO of Paramount was another famous movie businessman at that time, Michael Eisner. Katzenberg worked up through the mail room all the way to the position of president of the Motion Pictures and Television Production Division. When it comes to American dream stories, this one really seems to fit the bill. In nineteen eighty four, Eisner shifted over to Disney and Katzenberg joined on as

a junior partner. At the time, while the company had an enormous vault of beloved movies and animation, and the theme parks were still you know, real vacation destinations, the company itself was kind of in the doldrums. Creatively speeding,

Eisner and his team helped transform that. Katzenberg oversaw the animation division as well as Touchstone Pictures, the movie studio that made stuff for you know, adult audiences, and he gained a reputation for being quick to cut anything he saw as dead weight, downsizing the division in the process in order to cut costs. But his ruthless aggression worked.

The division had been bringing in about three hundred and twenty million dollars in revenue before he was brought on, but by the end of his run it was close to four billion dollars. Katzenberg was good at his job. Along the way, Disney had its renaissance in animated films with releases like The Little Mermaid and Beauty and the Beast, and this seemed to be a return to the company's

former animation glory. Honestly, a lot of the work Katzenberg did set the stage for the Disney that we see today, a true month of a media company that owns, you know, practically everything. Katzenberg had a massive falling out with Eisner in the mid nineties. However, the third piece of the Eisner Katzenberg puzzle was a guy named Franklin G. Wells, and he had served as the president of the Walt Disney Company since nineteen eighty four, and he was kind

of a balancing force. He brought sort of a harmony with Eisner and Katzenberg, and together they made great things happen. And he also didn't report to Eisner. Eisner was the company's CEO, but you know, Wells as president, actually didn't report to him. Instead, he reported directly to the board. But in ninety four, Wells died in a helicopter accident,

and things became unbalanced at the company pretty quickly. Katzenberg wanted a bigger role at the company, and he felt that Eisner was blogging him at every turn, and then he was either fired or he resigned in nineteen ninety four. The story changes depending on who's telling it, but he was definitely bitter about the whole thing, like super bitter. Not long after he resigned, in a huff or was fired again, depending on who you believe. He founded a

new company with Steven Spielberg and David Geffen called DreamWorks SKG. Spielberg, Katzenberg, Geffen get it, and it would be a new animation and live action film studio. Katzenberg was determined to repeat the success he had at Disney and then beat them at their own game. If you've seen the film Shrek, you will have seen some of Katzenberg's bitterness built right

into the movie. The movie has a sequence in which the villain's plans for an amusement park that lampoons the Disney theme parks plays a role, and it was definitely a jab at Disney. Very mature anyway. DreamWorks produced several hit films, though I would argue they aren't quite the classics of the Disney Renaissance animated films, but that's a discussion for a totally different podcast. A decade later, DreamWorks spun off the animation division as its own subsidiary called,

fittingly enough, DreamWorks Animation. Katzenberg was at the helm. Katzenberg was also an executive at the live action DreamWorks company at least until Paramount Pictures you know, Katzenberg's old employer purchased it in twentyd and six. In twenty fourteen, twenty years after he founded the original DreamWorks company, Katzenberg sold the animation studio to NBC Universal for three point eight

billion dollars. Now Katzenberg was already extremely wealthy, but he took home a few hundred million from that sale, and then he jumped into his next venture. To do that, he first established a holding company in twenty seventeen called Wonderco. It's a WndrCo. Through this company, he could establish other ventures that you know, actually do things. Holding companies typically only exist to own other companies, and it all has to do with money and taxes and leadership, hierarchies and stuff.

I don't want to go into it. Quibi would become one of the earliest ventures of this holding company, though at the time it had a different name, New TV. That was always intended to be something of a placeholder, and the idea was to create a video streaming service aimed at young adults who were increasingly relying on smartphones to access everything. The opportunity seemed fairly obvious create a

service designed for smartphone users with short form content. Katzenberg would make sure that the content was studio level quality, with big names attached both to starin and direct or produce the shows, but the stories would be designed to play out in the time it takes to say wait in a line to order at Starbucks, or write a subway train or whatever. They would fill a niche that

other services didn't quite hit. Stuff on Amazon or Hulu or Netflix was long form for the most part, requiring longer viewing times, and the short form stuff on services like YouTube tends to be a few or sometimes several steps below studio quality productions, so it seemed like a pretty solid bid. There were a lot of things Katzenberg was going to need to do to make this idea

into a real business. He was going to need investment money to get the ball rolling, he was going to need someone to serve as the leader of the business, a CEO for the company, and he was going to need to establish agreements with studios and filmmakers to produce content for the service and advertisers to support it. So while new TV would spring up as an idea in twenty seventeen, it would take a little bit longer to

become a reality. Now. One of those three tasks finding a leader, Katzenberg would check off in early twenty eighteen. Lead would be Meg Whitman, another famous entrepreneur in tech, so we need to hear a bit about her story as well. Whitman was born in nineteen fifty six in Long Island, New York, so we got a couple of

New Yorkers here. She attended Princeton and Harvard. She earned a master's degree in business administration, and then she went to work for Procter and Gamble in the brand management division in nineteen seventy nine. She got married and relocated to California in nineteen eighty one and joined the consulting firm Bain and Company, where presumably she fought Batman. Wait, I'm I'm sorry, I'm being told this is a different bane.

It's spelled differently in everything. Okay, that's my bad. In nineteen eighty nine, she became the senior vice president of marketing of consumer products over at the Walt Disney Company. So from eighty nine to ninety two she worked as an executive at the same company as Katzenberg, though they were in very diff diferent divisions of that company, Katzenberg over in the studio side and Whitman over on a

strategic planning side. Whitman did say that part of her job was to keep people like Katzenberg contained inside a box, and Katzenberg hated that that was in an interview that they gave it south by Southwest in twenty nineteen. From ninety two to ninety eight, she worked as an executive or leader of a few different companies, including some that

were difficult to manage. In nineteen ninety eight, a headhunter approached her about joining a new startup called eBay, and it took some convincing, but she eventually agreed to be the company's president and CEO. Now at that point when she joined, eBay had about thirty employees. By the time Whitman left the company in two thousand and eight, the

number was closer to fifteen thousand. She had seen the company grow tremendously and kept it afloat even after the dot com bubble burst in two thousand and two thousand and one. Oh And also while at eBay, Whitman would join the board of directors of drum Roll Please dream Works, bringing her back along with Kabzenberg after retiring from eBay,

Whitman turned her hand to politics. She ran for governor of California in two thousand and eight and spent millions of dollars, including an enormous amount of her own money, on her campaign. She actually broke the record for campaign spending in the United States. In the process. She got the Republican nomination for governor, but ultimately lost the election to Jerry Brown. In twenty eleven, she joined the Hewitt Packard board of directors and became the president and CEO

of the company. Four years later, she was in charge when HP split into two separate companies. One of those was HP Incorporated, which encompassed the consumer products division like printers and computers, and the other was Hewitt Packard Enterprise, which is a business to business company offering products and

services to corporate customers. Whitman made the move over to HP Enterprise and served as CEO until she announced her retirement in November twenty seventeen, although she wouldn't actually step down until the following February. In late January twenty eighteen, news broke that Meg Whitman would become the head of Katzenberg's new media company, then known as new TV, and she would also be the first official employee of that

company and officially started work in March twenty eighteen. Katzenberg would serve as chairman of the board and a bit of a busy body. At that same time, news outlets were reporting that this fledgling startup had a pretty massive goal for raising investments to the tune of two billion with a b dollars a princely sum. We call startups

that reach evaluation of a billion dollars unicorns. Katzenberg was looking to make new TV a unicorn right out of the gate, and this is probably something that I should cover for a second. Valuing a startup is a very tricky thing, largely because startups frequently can go months or years before having any real means of generating revenue, so they stay in business by raising investments over and over again.

A brand new company may have nothing to sell, which means there's no way for money to come into the business, and the goal is to get to a point where you're either bringing in revenue, or more specifically, you're bringing in enough revenue to both cover all of your operating expenses and still have some leftover. You know what, we would call profits, But a lot of startups have no

means of bringing in revenue right away. They may be based around an idea that is compelling and exciting and that could potentially bring in a lot of revenue down the line, but it will take time to execute upon that. In the meantime, the startups still have operating expenses. They have to pay employees and spend money on office space

and stuff like that. So the challenge for a startup is to convince investors that the idea is solid and a money maker in the long run, and that the people in charge are capable of taking that idea and making it a reality. The investors can pour enough money into the startup to foot the bill for operating expenses, banking on the bet that this will pay off in the long run and that they will get a big

return on their initial investment. Or they could just really hope that the company gets bought up by a larger entity and everyone gets a big payout just for coming up with a really cool idea. A media company in particular is a really expensive endeavor, especially one that's aimed at producing original and exclusive, highly produced content. So while two billion dollars is a truly enormous amount of money.

It was also not exactly an unrealistic need. If New TV was going to launch a new streaming service with a broad variety of original programming, much of its studio quality production, and backed by known entities in the entertainment industry, it was going to cost a lot before the service ever became available for customers, and so Whitman and Katzenberg began to have a lot of meetings with potential investors, and those meetings paid off. I'll explain more after this

short break. The temporary digs for new TV slash Quibi was in a shared working space in Los Angeles owned by Serendipity Labs. Coworking spaces are a topic that I should probably tackle at some point, though it's really only tangentially related to technology. It served as a base of operations for doing the legwork of getting investments and interviewing

potential team members, and it was only temporary. Later on they would move into what has been described as lavishly decorated and expansive headquarters now according to Variety, by August twenty eighteen, the company had fewer than ten employees, and Meg Whitman said that she and Jeffrey Katzenberg spent half to three fourths of their time interviewing potential executives to

join the group. While the streaming media landscape wasn't as ludicrously crowded in twenty eighteen as it is today, launching a brand new competitor at that time with original programming and no major established brand behind it like Disney or HBO was a pretty gutsy move. When Katzenberg and Whitman started looking for investors, I'm sure they frequently had to dismiss the argument that their service would have to compete against Netflix, Amazon Prime, Hulu, CBS All Access, YouTube, Premium,

HBO Now, not to mention numerous other services. But their sales pitch was that this new service would really focus on the mobile market. The content would be made with smartphone users in mind from the beginning, not just in the length of content, but in the actual way it shows up on screen. It was going to be optimized for the mobile experience. As long as the content was good and the experience was compelling, they argued, it would work.

It would scratch an itch that people had, even if they didn't know they had it, and it wouldn't require viewers to break up a movie or show into smaller chunks, because that had already been done for them. The content on the service would already be in those small chunks. Still, it had to be a tough sell. And heck, it's not like no one had ever tried something like this. Already, Verizon had spent more than a billion dollars launching a

service called Go ninety. This service included original short form videos as well as licensed content from network television. The service was free to Verizon users, with the idea that advertisers would leap to be part of a service that was marketed to twenty five to thirty five year olds, and that's what would bring in revenue since these folks were spending more and more time on their phones. The

only problem was it flopped. Verizon pulled the plug in the summer of twenty eighteen, and that I'm sure made Quibi's business case even harder to sell now if it weren't for the fact that you had the pairing of Katzenberg, who had spent his entire professional career in media and much of it in leadership positions, and Whitman, who had gained notoriety for taking a small internet startup into a

publicly traded, enormous company. I don't think new TV would have received an enthusiastic reception among investors, but the pair's expertise and business acumen were undeniable, and the list of investors grew relatively quickly. That list included a lot of established media companies. In fact, all the major studios would become investors, so that included companies like Sony, Viacom, WarnerMedia, MGM, Lionsgate,

and even Katzenberg's old target, Disney. In addition, there were other companies investing as well, such as Liberty Global and Ali Baba. All told, the first round of venture capital funding, which closed on July thirty first, twenty eighteen, raised around one billion dollars, pretty impressive for a business that had

no product yet. In addition to that money, the holding company Wanderco, had secured seven hundred and fifty million dollars of its own Now, that was not just for new TV, though Variety reported that quote a good portion end quote of it was going into the venture. It wasn't quite two billion dollars, but my goodness, it was a lot of money. Wonderco would be quote a significant shareholder end quote, but not a majority shareholder in this company. Katzenberg was

playing KOI with evaluation of New TV. He declined to disclose how the company was being valued, at least publicly. The biggest investor of the group was actually a firm called Madrone Capital, which was headed by the chairman of the Walmart chain of stores, Greg Penner. One decision the leaders made early on was that new TV was not going to produce content itself. Instead, it was going to partner with established entertainment producers and license programming from them.

Through these licensing agreements, new TV would cover the costs of production plus some and it also meant that new TV would have a lot of different entities producing content for the platform that would help the company avoid having a production bottleneck. Katzenberg said in interviews that to have a successful launch, the service would need a lot of content, and not just a big quantity of it, but a variety of content as well. To appeal to a broad

spectrum of audiences. Some folks might be big fans of action, while others prefer horror or comedy or and I hate to use this phrase, reality television. I'm something of a snob in that regard, not to mention, you know, I worked for a company that made reality television stuff, so I had a chance to see, you know how totally not real. It can get enough editorializing. Katzenberg also stated that the licensing deal they had in place was quote

highly highly appealing into quote to entertainment studios. Now, I don't know any of the details of those deals, like whether or not there's an expiration on the license, meaning, you know, some content might eventually disappear off the platform. If you've got a Netflix subscription, you're probably familiar with this trend. Honestly, I'm still upset that the sketch show

that Mitchell and weblook disappeared from US Netflix streaming. But anyway, Vulture reported that the deals typically included the cost of production plus another twenty percent, so that's not bad. Now. At this point, the venture was still called new TV, and the plan was to launch by the end of twenty nineteen. That would mean building out the infrastructure, building the app itself, securing the cloud services, or building them.

But my guess is that Quibi relies on a major vendor to host the actual service, licensing all the content for launch, figuring out the marketing strategy, and getting those advertising deals in place. As for revenue, that was really something that Whitman and Katzenberg actually had concrete plans for, which is a nice change of pace with startups. Typically, when I do talk about startups, the details around how the company is actually going to make money get a

little fuzzy. In fact, I suspect a lot of startup founders are just hoping that a bigger fish is going to come along and scoop up their company, buying it for a ridiculous amount of money, and then some bigger companies then saddled with a service that might not ever even generate revenue. But this was not one of those cases. From the start, the plan was to offer two tiers

of subscription service. One would be an advertising light option, kind of similar to how Hulu operates, where the subscription fees would be subsidized by in app advertising. It would happen in between those short videos. The second option was to be an advertising free plan, in which subscribers would pay a little bit more but would be spared ads. Generally speaking, Whitman said her job was to focus on business strategy, well, Katzenberg would spend his efforts on securing content,

and they must have been working pretty darn hard. Whitman told the press that new TV was merely a placeholder name and that they would soon announce a new official name for the service, and sure enough, in October twenty eighteen, the new name was launched. New TV officially became Quibi. Now the word quibi Quibi is a combination of the words quick and bite, because that's what the content on the service is all about, quick bites of content, whether

it's drama or comedy or whatever. Around that same time, Katzenberg announced that filmmaker Guillema del Toro, who has made some truly phenomenal films that I adore, would be making some sort of zombie story. Sam Raimi, another filmmaker who's work I love, would be producing a horror anthology called Fifty States of Fright, about folklore and urban legends in the States of the United States. Jason Blum also had a project announced, so at least when it came to horror,

Quibi was shaping up nicely. But while various productions may have begun, there wasn't anything to show off yet just the idea, which admittedly sounded pretty interesting. I mean, whenever anyone has more than a moment of nothing that's going on, they tend to whip out their phone. Creating content specifically to entertain people who do that sort of thing makes sense, and grabbing big names in entertainment would help raise Quibi's profile as well as act as a great draw for

curious fans. At least that was the idea. In twenty nineteen, Whitman and Katzenberg were still making the rounds at various conferences, talking up the service and announcing new content partners and projects. At south By Southwest in twenty nineteen, Hey, you guys remember when we used to have south By Man. I feel awful for all the people who are counting on it this year. Anyway. At south By in twenty nineteen, Katzenberg and Whitman delivered a keynote about Quibbi and gave

a little bit more information about their plans. At this keynote, Katzenberg made another case for Quibi, this time to consumers. He said that the analogy he liked was Dan Brown's novel The Da Vinji Code. Katzenberg said that that book is four hundred and sixty four pages long with one hundred and five chapters, which means it averages out to fewer than five pages per chapter. The result of this is that you could read a chapter in just a few minutes, and you could read as many or as

few as you liked. You could put the book down, you could pick it back up later and just continue on. Brown structured the book so that the chapters were discrete units of story, with the end of one being almost like a cliffhanger for the beginning of the next one. Now, personally, I found this style to be exhausting. I hate it, But I'm in the minority here that the book was a massive hit, and I'm old. I mean, I feel

the same way about Mulin Rouge. Can't stand the movie because the camera never stays on anything for more than a second. But then again, I'm old, So I'm not saying that this style is a bad thing. It's just not my thing. But maybe it's the thing that lots of young people like. That was the target audience anyway. Katzenberg said the goal of Quibi was to allow storytellers to craft content with that sort of short form in mind.

The overall story could be very long, feature links or longer, but the chapters of the story would be ten minutes or less, with ad breaks in between them. The pair also revealed that the Quibi app would allow users to view videos either in portrait or in landscape mode, so either holding a phone vertically or horizontally, and in either

case the movie would be full screen. Witman in particular mentioned that this experience was unlike other streaming services that work on mobile, with some stuck purely in one mode or the other and others creating a large amount of unused space when you go from landscape to portrait. Katzenberg

also differentiated Quibi from YouTube. He pointed out that content creators can make videos for YouTube and make money off those videos, but the advertising model on YouTube means that as a creator, you have a limit of how much you can spend per minute. You can only spend up to three thousand dollars per minute, which that's already incredible to me, but after that you won't make enough money

to cover the costs. And while that works great for someone who's making load to maybe mid level production videos, high end production stuff you know, like movies and television can cost upwards of one hundred thousand dollars per minute, and so he argued, Whibby has a place because it would allow for that kind of high production content that

YouTube just can't support. Whitman added that the timing for Quibi was lining up with the rollout for five G networks, and just for a quick recap, five G is actually a general description for the next generation of wireless network technologies.

There are actually many different flavors of five G. The relevant bit here is that these technologies will allow for much larger filesized transfers across a network at any given moment, so you can watch something like a high resolution video on a mobile device without having to worry about stuff like buffering. Now, there are a couple of things outside

of Quibi's control that didn't really come up in these conferences. Sure, five G would be a great help to Quiby's use case, but then you also have to worry about stuff like battery life pulling down big files and playing high resolution video. Consumers a lot of battery power, and battery technology just doesn't evolve as quickly as some other technologies do, so that's a potential bottleneck, and another big one is data caps.

If the company providing network service to your device places caps on how much data you can use in a month, and app designed to push big video files for you up to twenty minutes a day could end up being super expensive because of data overage fees. As for that twenty minute figure, Katzenbriggs said that was kind of their target to create a service where users would spend twenty of the seventy minutes a day on average that they would watch video on their phones. This time those twenty

minutes would go to Quibi. Again, Quibi doesn't have control over this stuff, but then if they're going to talk about how five G is helping their case, I think they have to acknowledge how these other factors are challenges to overcome. Now, when we come back, I'll talk a bit more about the lead up to the launch and what has happened since, But first let's take another quick break.

The content plan for Quibi was incredibly ambitious. The idea is for the service to launch a Lighthouse series every other week. A lighthouse series is a prestige story consisting of several chapters that collectively would make the story feature length. So every other Monday Quibi would launch a news series consisting of ten to fifteen chapters or so of episodes,

each around ten minutes in length. In addition, the service has news shows that update daily, clip shows that show sports highlights, documentaries, reality TV shows, competition shows, entertainment news shows. The list goes on. Katzenberg said the service would launch one hundred new short videos on Quibi every week, so that means more than five thousand per year. In fact, for the first year, the idea was to release eight

than five hundred Quibis. It's a truly enormous amount of content, so it's no wonder that the company was still seeking out an additional one billion dollars in funding in twenty nineteen, after having already secured more than a billion the year before. By the end of twenty nineteen, the streaming landscape had changed a great deal, and this was before the COVID nineteen crisis. Disney had launched Disney Plus, HBO Max was a new service on the way, Several other high profile

services had either launched or announced an upcoming launch. A crowded streaming space was getting even more crowded, with each service competing for the entertainment dollars of consumers. The fact that Quibi was aiming purely for a smartphone viewing experience, rather than a service that was meant for televisions that could also be viewed on smartphones was a big differentiator,

as was the price. In June twenty nineteen, at the produced By conference in California, Katzenberg and Whitman announced that Quibbi's ADS supported subscription would cost four dollars ninety nine cents per month. If you wanted to upgrade to the AD free experience, you could pay seven dollars ninety nine cents per month. Compared to other streaming services, this is on the low side, but not outrageously low. The standard package for Netflix is twelve dollars ninety nine cents a month.

Hulu's basic plan with ADS is five ninety nine per month. Without ADS, it's eleven ninety nine. Amazon Prime, if you subscribe to it on its own, is eight ninety nine per month. Disney Plus is six ninety nine per month. Also, apologies for talking about all of this in terms of US dollars, but to go through all the variations and explain which services are available in various countries would that would be a really long and boring discussion, even for

my show. Quibi continued the march toward launch, paying for a content production and negotiating ad deals, and along the way some early trouble signs started popping up. A few executives began to depart the company. One was a former Hulu executive named Tim Connolly, who was the head of Partnerships and advertising. He left in August twenty nineteen, and

the company subsequently eliminated the position he had held. Another was jenis Men, formerly of The Hollywood Reporter, who had served as the head of Quibi's daily content you know, like news and the scuffle bolt was that Men had been having conflict with Katzenberg, who was particularly involved with content. There were rumblings that Whitman and Katzenburg had a bit of beef between each other on occasion, and rumors that Whitmen had even threatened to walk away from the business

if Katzenberg didn't back off a bit. So the implication was that Katzenberg was really micromanaging and Witmen felt she wasn't being allowed to do her job. I don't know how true those rumors are, but whatever the case may be, Whitman stuck around. Connolly and Men would not be the only executives to leave Quibi, though the next one I'm going to mention didn't make tracks until after the service actually launched, so I'll get to that in a little bit.

And I guess that's something. Quibi landed ad deals to the tune of a few hundred million dollars leading up to the launch, and the advertisers included really big names like Google, Walmart, Pepsi Co and more. Whitmen was instrumental in making those deals and the ad dollars would be there when the service, now scheduled to launch in April twenty twenty, would go live, so the stage was set.

By late twenty nineteen, the company was banking on some hunches but didn't have much hard data to support them, and the initial idea was to only offer Quibi for smartphones. There was no intention to offer a version that would play on televisions or computers. And then we get to

twenty twenty and the COVID nineteen outbreak. I don't have to tell any of you how disruptive the outbreak has been, particularly in the United States, where we see continuing trend of people behaving in irresponsible ways, and I apply that label to everyone, from citizens to politicians. COVID nineteen has changed just about every aspect of life, and it definitely changed how people are accessing entertainment. With more people staying home, there was less of a need to access stuff using

a smartphone. I mean, we've got computers and TVs and game consoles and other stuff right there in front of us. I think a lot of us use phones because in our normal lives, that's the option that's open to us. We want stimulation and entertainment. We've got the phones with us all the time, So that's the solution to our

perceived problem. In the olden days, you know, before smartphones, we had to wait until we were at some sort of connected screen, whether it was television that was connected to satellite or a cable or even over the air antenna, or a computer connected to the internet. Smartphone entertainment was sort of a matter of necessity once it was able to support it. Suddenly, Quibi's use case seemed less relevant. The nature of the game had changed dramatically and unpredictably,

leaving Quibi's whole value proposition in question. The service launched on April sixth, twenty twenty, and it included a free ninety day trial with ads supported service. Not surprisingly, a lot of folks downloaded the app when it first launched, nearly three million within the first two weeks, but the real test was yet to come. For three months, people would be able to serf Quibi and check out content.

Would that be enough to hook them so that they would pay for a subscription once the ninety days were up. There was definitely no sh shortage of content. There were tons of options with big name talent attached to them. Some of it was written specifically with Quibi in mind. Some were adaptations that tried to work within the confines of Quibi as best they could. And that's no small thing. Shaping a story so that it fits naturally in ten

minute chunks requires a lot of work. Heck, I typically try and have the three big segments and tech stuff last approximately fifteen minutes each. And I never want to put an ad break in the middle of a thought or concept if I could possibly avoid it, and that can be tough. I imagine it's got to be a lot harder when you're presenting a long form story over the course of a series of short blasts of video. Before April was over, another top level executive left the company.

This time it was Megan Imbras, who was head of brand and content marketing. In a departing email, she said that post launch was quote opportunity, time to transition end quote I imagine, So I bet it's getting pretty darn

hard to land brand deals right now. The company saw the limitations of having the service only available on phones was going to be an issue in the stay at home world of COVID nineteen, so in May twenty twenty, they released a version of Quibi that works on Apple TV, and a little bit later they included the ability to send Quibi to a chrome Cast device, which allows people

who have Chrome Cast to play Quibi on televisions. This was a quick pivot to try and course correct for a world that was drastically different than twenty nineteen, when the potential for the service seemed, you know, fairly relevant. In June, the Wall Street Journal ran apiece analyzing how Quibi was doing. The company had a goal of hitting seven point four million subscribers after the first year, so

by April twenty twenty one. In other words, ording to the Wall Street Journal piece it was really on track to just hit two million subscribers, and this piece also went out before the three month free trial period had expired.

App downloads had slowed after an initial spike following the launch, and the Journal also reported that the company expected it would need to raise another two hundred million dollars by the second half of twenty twenty one in order to keep things going, and that executives were also going to take a ten percent pay cut to help lower costs. In addition, COVID nineteen has thrown a monkey wrench on

content production. It's a lot harder and riskier to produce Hollywood level television and film programming, and so that fire hose of content might be dribbling out before the end of twenty twenty. Things are not looking too good for Quibi right now. The bet on the service might ultimately go south. I actually downloaded Quibi for the purposes of this podcast, just to see what it's like to use. The feature allowing users to view videos in either portrait

or landscape is called turnstile. I can confirm that it works in that you do get full screen with no black bars, no cropping, but if you're watching it in portrait mode vertically, then the app cuts off some of the stuff that's on either side of the frame. However, the idea was that filmmakers would take this into account when shooting the content. For Quibi, the process of shooting and editing would keep the most relevant stuff in frame when you are viewing it in portrait mode, and I

think that's interesting from a filmmaking perspective. It means cinematographers and directors really have to think about the composition of their shots, filming them in both landscape and portrait, or editors have to make really tough choices when it comes to how they frame a sequence so that someone watching the program in a vertical orientation isn't going to miss out on something critical that's happening within the action of

the story. I tried watching a couple of things. I haven't really found anything that really hooks me, though I have yet to watch an episode of Reno nine to one one, and I very much enjoyed that show when it was on its run on Comedy Central, so I will have to check that out. But I think part of the issue is that the ten minutes per segment thing is a real problem. I think creating very good short form stuff that linked together makes a compelling long form story is just hard. I think of it kind

of like the general rule of fiction. The shorter the format, the more difficult it is to do well. So writing a good novel is hard, writing a good novella is harder. Writing a good short story is even harder than that, and writing a truly great short poem is extremely difficult. I think the same thing is holding true for video content, and it's why I've always felt that tech stuff should just be as long as the subject requires it to be. Will Quibi be able to survive its slow start, I

don't know. I'm a little doubtful. I mean, it is an expensive endeavor. There are reports that advertisers already want to renegotiate in light of lower app download rates. I mean, why would you pay premiums for impressions you're not getting? The content production side is still pretty shaky with COVID nineteen going on. The user numbers aren't there yet, and now that we're out of the ninety day free trial, it's going to be really challenging to win an audience

large enough to support the business. Gizmodo reported that more than ninety percent of users who enrolled in the free trial stopped once the trial ended. It may be that Quibi is sunk. Some folks think that was inevitable even without COVID nineteen. Now I don't know if that's true. I do think it was an ambition long shot, but I don't know that it was impossible. However, I do think the health crisis was an unforseeable obstacle that might

just be too great for the company to overcome. To all the people out there who are working for Quibi, my heart goes out to you. For all the writers, actors, directors, and crew who are getting work because of Quibi, you know, people who had a chance to be part of something new. I feel for them too. It is really hard to get stuff produced and distributed. It's just really tough. Out of every film or TV show you see, there are

hundreds that never get made. So I hate to see any venture like this fold, even if I don't think it worked all that well. As for Witmen and Katzenberg, they'll be fine. The investors, no, they'll be fine too. It'll sting a bit, but let's face it, they're wealthy too. They can handle a sour bet that's not going to break the bank for them. But for all the people who are the rank and file who are working for this,

that's tough. And I really hope things turn around. I think it's a lot to ask for that to happen, and it's also a lot to ask consumers. It's getting increasingly difficult to convince people. Hey, you know you've got four or five subscription services going right now, how about you add this one to the list? And Whitman at

south By Southwest said something interesting. She said that chances are we're going to see a pretty big increase in the number of streaming services in the short term, and then over time audiences will end up gravitating toward probably three or four of them, and the others will fade away. And the hope was that Quibi would be among that three to four. I think that hope is getting more and more unlikely as time goes on, but I hope

that I am wrong. That's it for this episode. It's interesting to cover a company that has only really been live since April of twenty twenty and is already on very shaky ground. It was interesting to dive into the history here. If you guys have suggestions for topics I should cover in future episodes, whether it's a company, a technology, a trend in tech, anything like that, let me know. Reach out on Twitter to handle It's tech stuff HSW and I'll talk to you again really soon. Tech Stuff

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