Quibi, built for mobile-only viewing by an audience envisioned to be phone-toting millennials, now wants to get on more living-room TVs.
The company, founded by ex-movie mogul Jeffrey Katzenberg, has been in talks with both Roku and Amazon about building native apps for their connected-TV platforms, Variety has learned. In Amazon’s case, that would be its family of Fire TV devices.
Quibi’s negotiations with Amazon have “recently picked back up,” according to a source familiar with the discussions. Roku’s talks about bringing Quibi to the platform are said to be in very early stages; a source cautioned that Roku may walk away from a deal based on the revenue-sharing agreement proposed by Quibi. (A Quibi rep did not provide comment on its talks with Roku and Amazon by press time.)
One reason for the urgency: Quibi’s mobile app download and viewership numbers have fallen far short of its expectations, before it even starts charging for subscriptions. Indeed, at its current pace, Quibi will have less than 2 million paying subscribers by April 2021, less than 30% of its 7.4 million year-one target, the Wall Street Journal reported. (Quibi disputes the Journal’s numbers but declined to offer different subscriber projections.)
Quibi’s launch was partly bedeviled by a problem not of its own making: It debuted April 6, just a few weeks after the coronavirus pandemic locked down large portions of the U.S. — deflating its watch-on-the-go proposition. Initial users were frustrated they couldn’t watch Quibi on TV.
Being able to “cast” Quibi to TVs had long been on the startup’s road map, but the company accelerated that timeline after the coronavirus hit. It added support for Apple’s AirPlay the week of May 25, letting users send streams to Apple TV set-tops and other compatible devices. On June 9, Quibi updated its Android and iOS apps to support Google’s Chromecast and Chromecast-integrated TVs.
Now Quibi chief product officer Tom Conrad and his team are working to get the struggling streamer onto the two biggest internet TV platforms, and possibly others. It’s a tacit acknowledgement that the strategic decision to quarantine Quibi on smartphones, a bid to stand out from the Netflixes and Hulus of the world — “Mobile video is the white space,” Katzenberg said last year — has not panned out as hoped.
“They need eyeballs, and they need to monetize eyeballs,” an industry source said about Quibi’s ramped-up ambitions for connected-TV distribution. As Roku and Amazon have grown in scale (each has an installed base of more than 40 million over-the-top U.S. households), their clout has increased. Note that WarnerMedia has not yet clinched deals for HBO Max on Roku and Amazon as the parties haggle over terms.
Even independent of the COVID-19 situation, observers say the mobile-only model brought to market by Katzenberg and CEO Meg Whitman probably wasn’t the right way to go.
“The idea they came up with was sound: It’s based on the common knowledge that younger people watch shorter content on mobile devices. But they may have applied it too literally,” said Gary Schanman, a former Charter video exec who heads Denver-based media and tech consulting firm GB Monday.
To gain subscriber traction, Schanman said, “The content they are offering has to be everywhere, and right now it isn’t. They should get it on the big-screen TV to maximize the value to subscribers and be ubiquitous.” He also suggested that Quibi should continue to offer a “freemium” content tier to better expose people to its programming and help them see the value: “You want Chrissy Teigen’s show to be viewed so consumers can see why this content fills a need worth paying for.”
The bottom line is that content with high production values — Quibi has boasted that it’s spending up to $100,000 per minute on its original content — “needs to be on TV,” said Tal Chalozin, co-founder and CTO of ad-tech company Innovid. Regarding Quibi’s assertion that quarantines have depressed the app’s takeoff because people are watching less mobile video, Chalozin noted, “TikTok and Snapchat are proving that wrong.”
At this point, one thing Katzenberg — who has raised $1.75 billion for the venture — almost certainly will not do is throw in the towel on Quibi.
“Quibi launched only two months ago. It’s far too early to start packing up, discarding its core strategy and calling it a day,” said Peter Csathy, founder and chairman of Creatv Media, a consulting and creative services firm.
It’s imperative for Quibi to get to more TV platforms, Csathy agreed: “Being captive to our mobile devices has not helped them, especially during this pandemic where consumers have been obsessed with streaming in their living rooms.”
But beyond that, Quibi will need to reexamine its programming strategy as it relates to the 18-34 audience it’s trying to reach, Csathy said. “Is that audience ‘moved’ by big traditional Hollywood names like [Steven] Spielberg? Or is that kind of branding not important — or even relevant — to the target audience?” he said. “Based on initial results, changes definitely must be made.”