Editor’s note: We get many newsletters and for executives in media might we suggest The Term Sheet written daily by Polina Marinova. See her commentary today about the mega fundraising happening with Quibi.
Another day, another mega-round.
This time it’s a company that’s been around for two years without having launched a product to the public. Yep, it’s Quibi, the short-form, mobile-only video platform that finally plans to launch this April.
Quibi, which is short for “quick bites,” just announced an additional $400 million in funding for their venture, which is on top of the $1 billion they raised in 2018 from a star-studded roster of investors. They include Disney, Alibaba, NBCUniversal, 21st Century Fox, Lionsgate, Metro Goldwyn Mayer, Sony Pictures Entertainment, Viacom, and Warner Media.
So yeah, that’s basically like all of Hollywood.
Who’s behind Quibi? Media mogul Jeffrey Katzenberg and former eBay and HP CEO Meg Whitman. The pitch: “TV, but on your phone,” based on the idea that most of us spend hours and hours on our phones. So rather than full-length TV shows, the company will release its videos in “bite-sized formats of 10 minutes or less.” The service will have two pricing tiers — $4.99 per month with ads and $7.99 per month without ads.
Mobile streaming is hardly a new concept. People have been consuming short-form videos on Facebook, Instagram, YouTube, and Snapchat for a pretty long time. Not to mention that Quibi will be competing with Netflix, Apple TV Plus, Disney+, HBO Max, and NBCUniversal’s Peacock.
When Fortune’s Andrew Nusca asked Katzenberg last year how Quibi plans to fit into the saturated streaming economy, he explained passionately how Quibi’s different and doesn’t have competitors. (As a tech reporter, you hear this pretty much every day.)
“I don’t want to get defensive, but… you’re comparing apples to submarines,” Katzenberg said at Fortune’s 2018 Brainstorm Tech conference in Aspen, Colo. “You can’t get what we’re doing on a television set.”
I fall right in Quibi’s target demographic, which is users who are 25 to 35 years old, and I don’t watch TV. I primarily watch Netflix or random videos on my phone. But here’s the biggest problem that contributes to some of my personal skepticism: I use Facebook and Instagram regularly. Do I watch short-form video content on Facebook Watch, Instagram TV, or Snap Originals? Never. And that content is free.
Let’s look at some of the innovations that Quibi has in store. First, it’ll break up movies into several-minute chapters. This means a two-hour movie could take 12 chapters to play in its entirety.
Or, you know, I could just press pause on my regular two-hour movie and return to it later.
Secondly, Quibi revealed its “Turnstyle” feature, which will allow users to rotate their smartphone or tablet to watch content in both portrait and landscape modes to see a different perspective. Katzenberg says it “is unlike anything creators have had before.”
Realistically speaking, how many times do you rotate your phone while watching a video?
I’m willing to be wrong on this one, but I just can’t quite identify the problem that Quibi is trying to solve. Katzenberg is confident that there’s a need for well-produced, high-quality video content for your phone. “We’ll actually create the next chapter of film narrative,” he said in a 2019 Fortune feature. “Five or 10 years from now, we’ll look back and go, ‘There was the era of movies, there was the era of television, and there’s the era of Quibi.’ ”
But as the story noted, if Quibi can’t sign up customers who are willing to pay for a subscription, its clever approaches to content creation won’t really matter.
The strongest case I’ve heard for Quibi has been: “You don’t want to bet against Katzenberg.” Undeniably, he’s a legend who has been in Hollywood for more than 40 years and has more connections than I could imagine.
For all this money and all this talk, I hope the future Quibi’s envisioning becomes reality.