Quibi is a new “quick bite” entertainment platform for the on-the-go and busy lifestyles Americans face. Quibi aims to capitalize on the growing amount of GenZ-ers and Millennials consuming content on their smartphones.
At first glance, Quibi was supposed to be the next big thing. They were developing shows with the help of major networks (Walt Disney, NBCUniversal, 21st Century Fox, and Sony Pictures). They also had a long list of famous investors and notable actors and personalities such as Liam Hemsworth, Chance the Rapper, Offset, Idris Elba, and KeKe Palmer, to name a few.
Due to Quibi’s paid growth strategy, unlucky timing, and the rise of other forms of media, Quibi is underperforming in attracting its goal amount of users to its platform.
Why Quibi’s Paid Growth Strategy Didn’t Pay Off
Growth hacking is a popular buzzword nowadays in Silicon Valley and is the idea of growing rapidly with not a lot of money. Quibi’s situation differs as they received more than $2 billion in investments. If you’ve been on YouTube, walked past Times Square, or watched TV, chances are you’ve seen an ad for Quibi. Quibi has put in around $500 Million in advertising so far this year. Additionally, Quibi spends, on average, $100,000 for each minute of each episode they produce. They are trying to skip organic growth, where customers slowly transition to the platform and speed to the size of Netflix. In other words, Quibi tried to pay their way to rapid growth.
Quibi gained the exposure they’d hope for, yet without allowing consumers to become a part of the journey, they underperformed. During the beginning weeks of Quibi, a total of 1 million users downloaded and signed up for the 90-day free trial. They got the exposure they paid for. However, after the trial period ended, Quibi lost 92% of its downloads and subscriptions. That’s only 80,000 continuing subscribers. Quibi’s goal for the end of 2020 was to attract 7.4 million, to put things into perspective.
Quibi’s paid growth strategy is very dangerous because if it doesn’t pay off immediately or in this case, a pandemic comes around and you’re left screwed.
Why there’s more than the pandemic to blame
In May, Jeffrey Katzenberg, Quibi’s founder, told The New York Times the pandemic was to blame for “everything that has gone wrong.”
As Quibi launched on April 6, 2020, the coronavirus pandemic was getting underway and new forms of legislation and medical research ordered us to stay inside as an effort to calm down the spread. With all the time in the world now, stuck indoors, Quibi wasn’t the right answer. The right answer for Gen-Zers and Millennials was binge-watching content on Netflix, Hulu, and Disney+ and endlessly scrolling through TikTok.
Quibi is sort of the middle ground between Netflix and TikTok by creating short-form content, much like TikTok, with the budget and quality of major streaming platforms like Netflix.
People wanting binge-worthy content during this pandemic is the sole reason for Netflix’s unprecedented growth. Since the beginning of stay at home orders, Netflix has gained 15.8 million subscribers, that’s almost the amount of subscribers they acquired last year. Quibi, on the other hand, hasn’t been able to make content because Hollywood is closed. Their model relied on releasing new episodes of their shows daily. Since they haven’t been able to create new content, Quibi has had to release new shows with no more than ten episodes, or “quibis,” for each. One “quibi” is equivalent to 6, 10, or 15 minutes of content. You could binge a season of quibis, but that would take you less than an hour.
TikTok’s growth hasn’t helped Quibi either. With TikTok, you can create content and consume “quick bit” content all on one platform. TikTok has over 800 million active users, with numbers rising every day. Being able to be a creator and consumer of content on TikTok’s platform has increased its popularity during the pandemic. The pandemic forced people mainly Gen-Zers to find a hobby to stay busy and for many of us, that has been creating TikToks.
As users can make their own content and watch others, TikTok has the ability to have unlimited amounts of content for a wide variety of niches. This is especially valuable for the Gen-Z and Millennial generation that is seemingly transitioning to this form of content (i.e., YouTube).
You could say that Quibi didn’t do its research for its target audience. A study found that 70% of Gen-Zers and Millennials preferred watching YouTube creators who they could resonate with, rather than famous actors. Because of this, we can see how TikTok has seen tremendous growth, where Quibi has not. There seems to be a community feature associated with the creation of content on TikTok. As TikTok allows creators to chat with their viewers, more and more creators have been using their comments and video type popularity to develop content their viewers want.
Katzenberg miscalculated the content that would most appeal to its audience, TikTok, on the other hand, is a great new example of people wanting to be a part of the content they consume.
Looking Towards the Future
While there may be room in the entertainment industry for Quibi in the future, more and more content is being produced on platforms such as Netflix, Hulu, Disney+ and TikTok.
The pandemic has affected Quibi’s business model entirely. Time will tell if the short bit entertainment platform can rebound. Either way, one thing is for sure, Quibi will become a business school case study in the future because of its over-hyped and under-performing platform.
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