"Despite reasons to be wary, Quibi’s leadership knows they’ll have to pivot dramatically if subscription numbers don’t grow significantly and soon. For the service to thrive past year one, their shows must be so good that people will pay a monthly fee to watch programs they can’t find elsewhere." -Noor Naseer, senior director, media and innovations, Centro
Quibi wants to solve a problem that millennials don’t claim to have – the need to fill short breaks in their day with 8- to 10-minute segments of highly produced video content. The new app asks marketers to believe that mobile-only, short-form video will command massive viewership that won’t mind seeing ads. Now a month after launch, it’s still not clear why. That’s due to misunderstanding the role of mobile in the lives of their intended audience.
Quibi offers a library of premium, original content portioned into snack-size episodes. A-listers have signed on to star in 7,000 pieces of content planned to release this year. Attached high-profile talent includes Jennifer Lopez, Zac Efron and Chrissy Tiegen.
The service bundles celebrities, high-end production, and viewing times more common for user-generated content. What makes the programming uniquely suited for mobile devices? Quibi claims it’s the full-screen vertical and landscape viewing options. Beyond that, there is no unique mobile functionality.
The Short Break Wars
Quibi founder Jeffrey Katzenberg said he doesn’t see the platform competing in the streaming wars. Rather he sees it up against Instagram, mobile games and other apps that people turn to when taking short, daily breaks. Consumers probably won’t see it that way. After a 90-day trial period, Quibi costs either $4.99 (ad-supported) or $7.99 a month (ad-free).
The average American household is already subscribed to 3 streaming services, and a 2020 report of US subscription habits found that consumers don’t want to pay more than $30 per month to stream. And the market is only getting more crowded with the recent release of Peacock and the debut of HBO Max.
A Misguided Quest for Millennials
It’s likely that Quibi’s plan to launch as a mobile-only offering was correlated with an ongoing quest by marketers to reach millennials. Long touted as an audience tethered to their phones, Quibi may have used the trait to rationalize restricting access to a single device as opposed to what millennials really use their phones for –expanded access to more screens and democratized socialization with other users. But the service doesn’t offer those things.
This is a miss by Quibi because it isn’t the first service to attempt reaching the elusive millennial through mobile-only video. Verizon made a similar attempt in 2015 with the now defunct Go90. The streaming service was quickly marred by an inability to draw audiences. Go90 was shuttered in July 2018. The similarities put a heightened expectation on Quibi to not make the mistakes of a predecessor it draws comparisons to. Company CEO Meg Whitman has since announced the acceleration of plans to allow viewers to stream content to TVs.
Perspective for Advertisers
Upon launch, Quibi arrived prepared to share an advertising success story. The platform sold out its first year of ads totaling $150 million in revenue before the April 6th launch. It features national TV buying heavyweights including Progressive, P&G, Discover, Pepsi and Google.
Most alluring about Quibi for advertisers is the low ratio of ad loads per hour. It will run 2.5 minutes of non-skippable ads for every hour of content while traditional TV runs approximately 16 minutes of ads across the same time frame.
Despite the lack of ad availabilities this year, brands may hesitate to place ads even when given the option for numerous reasons.
- With the economy in recession, marketers want to bet on sure things. As brands pull back on ad spending, unproven investment options likely won’t make media plans.
- It’s a tall order to ask users to pay yet another subscription fee when company executives themselves describe the platform as competing with free and cheaper options like social media and mobile games.
- There’s no ad-supported free tier, a path that more streaming competitors are offering.
- The ads look like regular TV commercials that can also be viewed in a cropped vertical format.
- Unlike social apps like Snapchat and TikTok, Quibi has yet to give users the opportunity to engage or enrich their viewing experience.
Keep an Eye out for Pivots
Despite reasons to be wary, Quibi’s leadership knows they’ll have to pivot dramatically if subscription numbers don’t grow significantly and soon. For the service to thrive past year one, their shows must be so good that people will pay a monthly fee to watch programs they can’t find elsewhere. If Quibi pivots quickly enough to make their content available on every device, and also showcase distinct ways that ‘Turnstyle’ video brings life to storytelling, there may be a fighting chance to persuade Millennial viewers and the advertisers that seek to reach them.
Centro provides advertising technology to unify programmatic and direct media buying with workflow automation.
The smarter way to stay on top of the multichannel video marketplace. Sign up below.