Remember Quibi? Unless you’re an avid follower of the rapid rise and fall of video streaming services, the name Quibi may not ring a bell.
Quibi was a video streaming platform targeted at millennials that launched in April 2020 and shut down just 6 months later in October. With $1.75 billion in funding from heavyweight Hollywood players and technology investors, Quibi was poised to disrupt the video streaming landscape. So what went wrong for this highly-funded startup?
In this post, we’ll do an autopsy of Quibi to understand the key factors that led to its failure despite having so much going for it on paper. Understanding why Quibi didn’t work can provide valuable lessons for other players in the digital video space.
Backstory: Origins of Quibi
Quibi was founded by Hollywood heavyweight Jeffrey Katzenberg, known for being the former chairman of Walt Disney Studios and one of the co-founders of Dreamworks Animation.
Katzenberg was joined by former Hewlett-Packard Enterprise CEO Meg Whitman. Together, they set out to create a mobile-first video platform aimed at millennials.
The idea behind Quibi was to offer short-form original videos optimized for viewing in short bursts on your phone. We’re talking about 5-10 minute bite-sized videos produced like high-quality television content.
This differentiated Quibi from longer-form platforms like Netflix and short-form video apps like TikTok or Snapchat. Quibi wanted to create a new category of entertainment for on-the-go viewing.
The name Quibi is short for “quick bites” to represent this concept of snackable video content. Katzenberg raised $1 billion in funding from Hollywood studios and secured another $750 million from external investors.
With this war chest, Quibi lined up projects with big names like Steven Spielberg, Guillermo del Toro, Jennifer Lopez and LeBron James among others. It seemed like Quibi had all the ingredients for success.
So where did it all go wrong? Let’s analyze the potential missteps.
Mistake #1: Misreading the Target Audience
Quibi aimed squarely at millennials, especially younger millennials between 25-35 years old. It wanted to be a mobile-only Netflix targeted at young professionals watching video during pockets of downtime.
However, studies show that millennials consume most of their video content not via mobile apps, but on their living room TV sets. Mobile viewing tends to be secondary.
Additionally, the type of premium shows Quibi was funding tend to be content millennials watch primarily on TVs. Mobile viewing leans toward shorter amateur and user-generated content.
So Quibi misjudged what and how millennials want to watch video. An mobile-only app with professionally-produced content was fundamentally misaligned with millennial preferences.
Mistake #2: Launching Amidst the Pandemic
Quibi launched on April 6, 2020, right as the COVID-19 pandemic was peaking. With lockdowns and stay-at-home orders issued, out-of-home usage cases like commuting or waiting in line evaporated overnight.
People were stuck at home binging long-form shows on Netflix and Disney+ rather than looking to fill spare minutes out and about with bite-sized content.
Quibi’s value proposition depended heavily on being a unique viewing experience outside the home. With that gone, it lost its positioning compared to existing services. The pandemic dealt a blow to Quibi right as it came out of the gates.
Mistake #3: Pricing and Distribution Strategy
Quibi offered a 90-day free trial but required users to provide a credit card upfront and automatically converted them to a paid $5/month subscription after the trial. This created unnecessary friction given its unproven value.
Making sign-up simple via app stores with in-app subscription options only after the free trial would have lowered the barrier. Quibi ultimately flipped to that model in May 2020 but it was too late.
Additionally, Quibi was only available as a mobile app. With no smart TV or desktop options, it limited access points at a time when people were streaming more at home. Supporting living room viewing could have given Quibi access to larger screens.
Unlike major streaming platforms, Quibi also chose not to invest in its own hardware. Without a Quibi button on remote controls, it made discovery and access that much harder compared to rivals.
Mistake #4: Confusing Interface and Experience
Quibi’s app interface was confusing and not intuitive. Unlike scrollable feeds like TikTok, Quibi used a paginated format requiring swiping back and forth. This made discovering content through casual browsing difficult.
Some design choices also seemed to counter the quick-bite experience. Videos were not easily shareable on social platforms. Instead of auto-playing the next video, the app defaulted back to the menu after each video.
These types of user experience missteps surrounding content discovery, sharing, and autoplay limited the stickiness and virality of the product. For bite-sized content, the interface really needed to remove all friction.
Mistake #5: Failure to Build a Robust Exclusive Library
While Quibi invested heavily in securing big-name talent, it did not build a deep enough library of exclusive content. Especially compared to incumbents like Netflix and Hulu boasting thousands of titles, Quibi’s few dozen shows looked sparse.
Without a vast catalog of content across enough genres and formats, it was hard for Quibi to become a daily streaming habit. A smartphone app competing for attention against the likes of TikTok and Instagram needs truly compelling content.
Quibi expected it’s talent pedigree and unconventional viewing formats like Turnstyle vertical video to be huge draws. But without a solid content foundation, the platform couldn’t scale beyond its initial curiosity-driven users.
The Final Act: Quick Demise
In the end, Quibi managed to garner only about 500,000 active subscribers after 6 months. Well short of its first-year target of 7 million, Quibi’s future as a standalone platform was in jeopardy.
It had burned through $1 billion, failed to resonate with audiences, and needed billions more to have any shot at viability. So Katzenberg pulled the plug, a humbling end to the streaming service with such high expectations out of the gate.
So Quibi crashed and burned in dramatic fashion. But was this debacle inevitable? Or are there lessons here that other streaming players can learn from and apply?
Key Takeaways: Learning from Quibi’s Failures
Looking back at Quibi’s rapid demise, some clear strategic missteps jump out. Here are the major lessons that can be gleaned:
- Know your target audience – Don’t rely on assumptions. Quibi assumed millennials wanted premium short-form videos designed for mobile. The reality was different. Know your users’ content preferences across platforms.
- Timing matters – Quibi’s use cases were upended overnight by the pandemic. Adaptability is key, especially when launching a new product or category.
- Friction hurts – Quibi’s sign-up flow and subscription model created needless friction. Fast and frictionless onboarding is critical.
- Design for your platform – A mobile-only app needs to remove all friction and be effortless. Quibi’s interface had too much friction.
- It’s all about the content – Without a vast and compelling content library, user acquisition and retention will struggle. A bold vision needs great content.
While Quibi is now a cautionary tale, its DNA still holds promise. TikTok has proven that short-form mobile video can be wildly addictive and viral when done right.
Quibi’s investors and creators understood those possibilities early. But executing a successful mobile video platform from scratch comes with challenges. As Quibi demonstrated in dramatic fashion, many things have to come together to achieve product-market fit.
The next startup aiming to crack short-form mobile video will assuredly study Quibi’s rapid rise and fall closely. The lessons from Quibi’s failure provide a blueprint of pitfalls to avoid.
Armed with those learnings, a disciplined data-driven team improving upon Quibi’s model could potentially still find the right formula. Only time will tell if a viable market exists for a billion-dollar mobile video pureplay.
In the unforgiving world of startup survival, Quibi joins the graveyard of once-promising companies. As John F. Kennedy once said: “only those who dare to fail greatly can ever achieve greatly.” Quibi dared greatly with its vision but ultimately failed in its execution. We should applaud their bold ambition while learning valuable lessons from why those lofty goals weren’t matched by reality.
The memory of Quibi will fade quickly, but its failure may prove instructive for future generations of mobile video pioneers. That may be the lasting legacy of a flashy startup that flashed across our screens briefly before winking out. So is the cycle of creative destruction.