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Don’t Think Quibi Will Succeed? You’re Not Paying Attention

"This is another mobile-powered innovation, as phones can quickly determine the time of day at a viewer’s specific location to know whether or not the sun has set." -Dan Taitz, Penthera

Of all the new streaming services launching in 2020, there’s one in particular that has industry thought leaders scratching their heads: Quibi. The startup, led by DreamWorks co-founder Jeffrey Katzenberg, has raised over $1 billion in venture capital and has some of Hollywood’s biggest names signed on to make content, including Stephen Spielberg, Guillermo del Toro, Idris Elba, and countless others. With so many odds in its favor, Quibi’s success should be an obvious home run. But there’s one reason so many experts are skeptical about the new service: all its content is short-form and mobile-only.

Yet, if you don’t think this kind of service will resonate with viewers, you’ve been ignoring the tremendous changes that have been happening in the video streaming world over the last few years. Mobile viewership has skyrocketed, and in 2019 mobile streaming grew more than CTV and PC viewership globally and in the US, according to Conviva. Further, studies indicate young people are spending more time with mobile and more time streaming online video. A mobile-only video platform isn’t a harebrained idea—it’s a smart investment in the new reality of video consumption.

Critiques of Quibi question how a mobile-only platform can expect to compete with powerhouses like Netflix and Disney+, which offer content that can be viewed on mobile, on computers, and on TV. Katzenberg has answered this himself, saying that Quibi doesn’t view the big OTTs as its competition. Instead, they’re vying for the small screen, which has its own competitors.

It’s been pointed out that Quibi’s launch may be bad timing. Given how many people around the world are staying home, will they really be excited about a service only available on their smallest screen? But there is evidence that shows mobile viewing isn’t just a way for viewers to watch when they are out and about. Mobile video is in a category of its own. TikTok is a mobile-only video platform that has an estimated 500 million active users, though its content is primarily user-generated. Meanwhile, 70% of time spent on YouTube occurs on mobile devices. These behemoths have already proved the appetite for short-form video that can be watched with smartphones. Quibi’s plan is to take this appetite and instead of serving up user-generated or creator-driven video, it’s going to dish premium content from already-established and beloved Hollywood creatives.

Innovating for the mobile experience

Quibi has also invested in elevating the mobile video experience, something more OTTs are doing as they begin to comprehend mobile as a critical component of viewership. But Quibi is outpacing other premium streaming services in terms of innovation and altogether reimagining how a service can satisfy mobile viewers.

You can watch HBO and YouTube on mobile, for example, but they’ve done little to optimize viewing on mobile devices. Meanwhile Quibi has developed viewing options that will add new dimensions to mobile viewership, with its flagship Turnstyle technology that allows viewers to seamlessly watch in portrait and landscape modes. This technology is an experiential improvement, but it also gives Quibi creators a new way to innovate storytelling, as the videos shot with Turnstyle provide multiple cinematic perspectives on the same videos.

Quibi is giving a lot of creative freedom to its Hollywood partners. Another example is that Spielberg’s offering on the service is a series of scary stories that will only air after dark, to aid the spookiness. This is another mobile-powered innovation, as phones can quickly determine the time of day at a viewer’s specific location to know whether or not the sun has set.

All this sounds like an exciting prospect for viewers, but critics of Quibi also question: will users really pay for this? Quibi is not offering a free ad-supported version of its service at launch, and instead—taking a page out of Hulu’s book—will offer different subscription tiers. The cheapest will cost $5/month and include ads while $8/month gives an ad-free experience. They are also incentivising sign-ups with a generous 90-day free trial for people in the U.S. and a free year for anyone with T-Mobile.

If Quibi sees its competitors as YouTube and TikTok, it’s worth noting that these services offer users a lot of free content in exchange for ads. And while Hulu charges a monthly subscription fee even for its ad-supported tier, Hulu gives users longform content as well as more viewing options with TV and laptop compatibility in addition to mobile. So the question really is, will users pay to watch mobile short-form content with ads? The answer remains to be seen, but for Quibi it seems likely. That’s because Quibi is also attempting to innovate the mobile ad experience.

Getting mobile ads right

Viewers don’t mind ads if it helps them save money. In fact, in 2019 Hulu said 70% of its subscribers are on the ad-supported tier that saves users $6/month. It’s possible that viewers will accept a similar deal for Quibi’s high-quality, short-form content, but it’s critical that the ad experience is flawless. The value that viewers see in paying less by watching ads will quickly depreciate if they are perceived as annoying or cause viewing interruptions like buffering.

Quibi seems to understand this, and has made its Turnstyle technology available to advertisers so they can create more interactive and engaging mobile ads. Quibi will also serialize ads into chapters that can play out as users watch multiple Quibi videos in succession—allowing advertisers to tell stories that keep viewers interested (and hopefully avoiding the ad repetition that users complain about on other platforms).

If Quibi and other ad-supported streaming platforms want to succeed long-term, they’ll need to continue improving the mobile ad experience. Perhaps that will entail more advanced targeting. Maybe they’ll solve the delays that caused 40% of streaming ad-starts to fail in 2019. As projections show mobile video ads dominating in years to come, it’s important that the experience these ads entail is one that isn’t off-putting to users, otherwise advertisers are wasting their money.

Quibi is likely to succeed, despite detractors. Its $100K-per-minute investment in premium content will inevitably pique the interest of millions of viewers. While skeptics question the mobile focus, Quibi understands that mobile viewership is an OTT gold rush. If Quibi understands that mining that gold relies on creating a friction-free experience for both content and ad-viewership, what some experts see as a huge gamble will prove to be a safe bet.

Penthera is a global software company that develops and deploys products that remove friction and improve the mobile video experience