Jeff Katzenberg knows Quibi is a longshot. He also believes young people are ready for a mobile video platform delivering specially crafted Hollywood movies in 8-minute bites. He’s right about one thing: Quibi is a longshot.
A mobile video platform from Hollywood
Jeff Katzenberg and Meg Whitman are working to build a new mobile video service called Quibi. Both believe that there is a smartphone audience developing for Hollywood produced content. However, Mr. Katzenberg isn’t planning to deliver full-length movies and shows. He is thinking of 2-hour movies delivered in 8-minute segments. Nothing like this has been tried before, and he knows it:
“What we’re setting out to do falls somewhere between improbable and impossible. That just happens to be our home address, and we love that.”
The platform, which is slated to launch in April 2020, is targeted at 25-35-year-olds. Ms. Whitman thinks it is difficult to test out the Quibi idea with that audience:
“It’s very hard to research and ask customers about something that doesn’t exist today. We’re using much judgment, and we’ll know if it works when it launches.”
However, there is some data to consult on the matter, and it confirms that the target audience is watching on mobile.
The audience is on mobile
Looking at Nielsen data suggests Quibi could be on to something. According to Nielsen, 18-34-year-olds spend far more time on their smartphone than watching TV. They spend 17 hours and 40 minutes a week in apps and on the web using their smartphone and 14 hours watching TV. Video certainly is an important part of the smartphone experience. The young spend 1 hour and 34 minutes per week in video-oriented apps and web sites. However, social is much more important, absorbing 5 hours and 18 minutes.
Social service providers also confirm that the smartphone is their most important platform. YouTube, for example, says 70% of viewers take place on the smartphone. Facebook says that 88% of its users access through their mobile device.
Others have tried and failed with mobile video
Others have tried and failed to gain significant attention on mobile. Go90, the mobile-oriented video service from Verizon, struggled to make an impression on users. It launched in 2015 and included a large amount of content including originals. The service even had a short video win an Oscar (Kobe Bryant’s animated short Dear Basketball.) It was not enough. The service closed mid-2018.
Jason Kilar, Hulu founder, tried to co-opt YouTube stars and an exclusive release window to attract significant audiences to his Vessel video service. The service was not able to attract enough subscribers at $2.99 a month, and it was eventually bought and shut down by Verizon.
Tough taking mind share from social
The value of incumbency is huge in the mobile market. Every smartphone comes pre-configured with YouTube and Facebook. As well, three-quarters of US adults say they use YouTube, and over two-thirds use Facebook.
To be successful, Quibi must wrestle some of the time away that people spend with the social giants. To do that, the content and experience it offers must be truly compelling. However, there is no evidence a movie meted out in 8-minute segments is what young people are looking for at all. The key ingredient Quibi could be missing is the social aspect of video consumption. In many respects, social interaction is as important as the videos themselves.
Why it matters
Quibi plans to target 25-35-year-olds with Hollywood movies craft for delivery in 8-minute segments.
The audience is certainly on mobile and watching video there.
However, unseating YouTube and Facebook will be tough, particularly with no strong social element included.