Quibi founder Jeffrey Katzenberg says the slow start of the mobile streaming service since its April 6 launch has provided “almost a beta” period that gives the well-funded start-up a chance to regroup.
In an online video conversation with Liberty Global CEO Mike Fries hosted Thursday by SeriesFest, Katzenberg maintained Quibi is poised for a rebound in the second half of 2020 as states reopen more fully. Commuting and other time viewers will be spending outside their homes is apt to increase, he said — plus, more people will be waiting on line across the country for things like haircuts and dry cleaning.
Quibi has thus far drawn just 4.5 million app downloads and 1.6 million subscribers, well short of initial targets. COVID-19 and the resulting shutdowns nullified the premise of the offering and became “a little bit of a cement wall that we ran into” upon launch on April 6, Katzenberg said. “But I’m quite optimistic that this use case is going to work. … People are loving this.”
Mobile viewing on TikTok, Snapchat and YouTube has been comparatively healthy during COVID-19, but Quibi’s programming is more ambitious, with pedigreed contributors and generally higher production values. After raising $1.7 billion in financing and spending heavily on promotion, Quibi has undershot the expectations of investors, content partners and advertisers. Like a lot of companies, it has set executive pay cuts of 10% but has added staff and says it is in sound financial shape and not planning layoffs, contrary to some media reports in recent weeks.
The “silver lining” of the sluggish start, Katzenberg said, “is that it’s actually given us the opportunity to have almost a beta. … In nine weeks, we have actually now seen so many aspects of the content, about what is working for them, what is most appealing to them, where our weaknesses are. All of that is being retooled as we talk here right now. We’re leaning in twice as hard on things that are working the best and leaning away from the things that are not.”
In July, the country will enter a new phase after the dark days of spring quarantine, Katzenberg noted. While he said elsewhere in the session that entertainment overall would not fully recover until a coronavirus vaccine is released in the first part of 2021 at the earliest, activity will increase in the meantime. “We are all going to be back on the go again,” he said. “The difference is, we are going to be waiting on line for more things than we ever have before.” He mentioned haircuts, restaurants, dry cleaning and other re-emerging sectors. “I hope Quibi is going to be there to fill those in-between moments.”
There are now 75 shows on Quibi, including daily offerings that were paused during the pandemic, Katzenberg said.
Because Liberty Global is an investor in Quibi, a fact that Fries disclosed during the session, questions did not cover too much sensitive ground. Unaddressed topics included a legal copyright battle with Eko, relations between CEO Meg Whitman and Katzenberg (described as a “struggle” in a recent Wall Street Journal article) or the company’s exploration of smart TV apps.
Quibi is not a combatant in the streaming competition among new entrants like Disney+, HBO Max and Peacock, which are trying to catch up with Netflix, Katzenberg said. “They’re competing for your time in a living room,” he said. “There are going to be some winners but probably some big losers in that.” By contrast, he argued, Quibi is in a “white space” and doesn’t need prime-time viewers, only people watching short-form video between 7AM and 7PM.
While Fries repeatedly voiced admiration for Quibi’s programming and maintained enthusiasm for its chances, he also offered a fleeting glimpse of the restlessness among the start-up’s blue-chip backers. “You’ve got some content that should be viral,” he said, as Katzenberg nodded. “We’ve got to find a way to get it viral, whether that’s social media or whatever.”
Comedy series Kirby Jenner, Fries added, is “hilarious” and a “viral piece of content that has to find its way out. Once found, people will love it and watch it. Anyway, you’ve got the story.”
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