There’s a perfectly good reason why Jeffrey Katzenberg refuses to take no for an answer.
“I didn’t know this about myself growing up as a kid, but I’m dyslexic,” says the former DreamWorks CEO. “And when I learned that about myself, it answered a question that I had wondered about a good deal of my life. For most people, when you see the letters N and O, it says ‘NO’, but when you’re dyslexic, you interchange things—that’s part of what it does. So when I look at no, I just see the word ‘ON’. That pretty much explains everything. I don’t know no, I only know on.”
And Katzenberg certainly has been on lately, ever since he cashed out with the $3.6 billion sale of the ’toon studio to NBCUniversal in 2016.
First he raised nearly $600 million from investors to put up a shingle for his new digital media and technology investment firm WndrCo in early 2017. Then, at the tail end of 2018, having teamed up with former eBay CEO and one time Golden State GOP gubernatorial candidate Meg Whitman, Katzenberg launched his latest project Quibi, a short-form and mobile-based subscription streaming service that debuts next year.
With $1 billion in backing initially from Disney WarnerMedia, Fox, Viacom and NBCU, plus MGM, Lionsgate, MGM, Sony and China’s Alibaba, among others, Katzenberg and Quibi CEO Whitman started with a lot of muscle for their audacious bid to attract the 25-35 demographic of digital natives to buy into a whole new form of media—though it’s not a process he likes to describe as disruptive.
“You know, disruption usually means you’re displacing someone,” Katzenberg muses. “I think this, as opposed to that, is actually incremental, and it’s creating something new, not replacing something. My wildest dream is that Quibi will create the next generation of film narrative. If we’re right—and I underline the word if, because we have lots of obstacles, and a very, very high mountain that we’re climbing here—but if we’re right, and obviously I believe we will be right, five years from now will be the Quibi era.”
A well-positioned pal sees no reason to doubt that likelihood. “Jeffrey is one of the smartest, most innovative people in the industry,” says, NBCU Vice-Chairman Ron Meyer, the new owner of DreamWorks. “I’ve known him for over 40 years, and there has never been a time he hasn’t accomplished what he set out to do.”
But besides a long-standing friendship, there is a strong reason for Meyer to be convinced. Unlike YouTube, the multi-genre and multi-formatted Quibi will offer high-end Hollywood production values and high-profile storytelling in quick bites for millennials to suit their real-time engagement patterns. But where once content was king, the defining characteristic of the present media moment is the platform.
Which means that while most of the industry are currently at the roulette table hoping that their bets on new competition to Netflix and Amazon pay off, Katzenberg’s chips are on the most ubiquitous platform of all—the phones we carry with us everywhere and all the time.
It’s an audacious move, but one that has the potential to sweep the table if its primary demographic finds just a few minutes in the day to watch. It may not seem too big an ask on the surface, but it would be a giant leap for the subscription service, which will be consumer-ready and suited-up with a varied array of originals from its day of launch.
“Watching video on the go has nothing to do with watching television through different streaming services,” says Katzenberg. “We’re going after the 60 to 70 minutes a day that our potential customers are already spending watching short form. They’re not giving that up because they’re watching Billions, or Mrs. Maisel, or whatever that new, great show is that’s coming on.”
That’s not to say that Quibi doesn’t offer comparable quality—drawing from the same level of talent that create those great shows, there are currently Quibi deals with Catherine Hardwicke, Lena Waithe, Guillermo del Toro, Sam Raimi, Anne Kendrick, NBA superstar Steph Curry, Telemundo, music manager Scooter Braun, Jennifer Lopez, Antoine Fuqua and Jason Blum, to name just a few. Then there’s the price point—from $5 to $8 a month—and the fact that Quibi is paying top dollar for licensed content from many of its own investors – content that will fully revert back to them after seven years in what could be a very lucrative feedback loop for all.
Helping Katzenberg and Whitman to bring that package to market with three new shows a week starting in April 2020 is an ever-growing team of the industry’s best and brightest, such as ex-DC Entertainment chief Diane Nelson and now former CAA agent Jim Toth.
“Our 25- to 35-year-old demographic is the most diverse demographic in the history of this country,” says Whitman, “so we have to really think all the time about being the audience. We also know that, in order to make enough content for this venue, we need all eight of the major studios in the boat rowing. Not one of them could make enough content for [Quibi] alone, and this needs to be a pretty rich experience.”
The seriousness of their intent is apparent just from stepping into Quibi’s HQ in the Hollywood Media District.
You can find an Emmy winner and national treasure chatting quietly in the lobby, a row of glass jars of candy line the walls, and the dirge of keyboard activity hangs in the air. Off the entrance, row after row of black monitors and young-ish staffers— there are about 100 employees right now—sitting in near-immaculate cubicles are surrounded by a perimeter of glass offices and corner conference rooms. Think Silicon Valley with a Tinseltown flourish.
A born wizard of the hustle, someone who clearly still has a joy for the magic of Hollywood after years and years of wielding (and sometimes being cut by) the sword of industry fortune, Katzenberg has been out on the road practically since day one.
Selling the start-up with an old school retail fervor, he’s been out with Whitman hitting target audiences of very different stripes—for example, Austin’s SXSW festival in March, then Beverly Hills’ Milken Institute Global Conference in April, and now they’ll be flying over the ocean to bring the pitch to Cannes. Whitman and Katzenberg (who once brazenly offered to pay $75 million for three more final episodes of Breaking Bad in order to stream them online in six-minute chunks for 50 cents a day) are clearly making a point to both investors and creators, as well as creating a new media model.
“In most respects, Meg and I are total opposites, which has become our superpower,” notes Katzenberg. “It works because of everything that I’m not good at, everything that I don’t do well, everything I don’t like doing, she’s a rock star at. Yet, here’s one thing that she and I share in common, and maybe it’s because we’re two old dogs who’ve done these tricks before. What we share in common is that both of us are at our happiest, and most engaged, and most excited, and most challenged, when we are doing something that falls somewhere between improbable and impossible.”