Quibi, the hotly-anticipated short-form video streaming platform from Hollywood legend Jeffrey Katzenberg and former eBay and HP CEO Meg Whitman, launched on April 6th to a fairly unremarkable reception: according to app intelligence platform SensorTower, Quibi saw only about 310,000 installs on launch day, with roughly 70% of those installs coming from iOS devices and 90% of those installs being from users in the US. Quibi peaked at position #3 on the Top Downloaded charts for US / iOS on launch day and has declined since; at the time of this writing, Quibi sits at rank #8.
Quibi raised nearly $2BN in funding before launch. Just 310,000 installs on launch day would be a mediocre outcome for a company with much less funding — for a company with the profile and wealth of Quibi, a launch of this scale is dismal. For context: Disney+ saw more than 3MM installs on launch day in November 2019, and the app continues to scale impressively with more than 15MM installs over the course of March 2020. Also consider the fact that Quibi launched during a global pandemic in which many consumers are quarantined at home with an overabundance of free time.
Why was Quibi’s launch so weak despite the depth of its coffers, despite the star power of its launch content (Quibi’s catalogue includes shows starring Chance the Rapper, Liam Hemsworth, and Chrissy Teigen, among others), despite the breadth of its pre-launch advertising campaign (Quibi bought a spot during the Oscars), despite the fact that Quibi offers a 90-day free trial period, and despite having one of the most celebrated Hollywood creators in modern history, Jeffrey Katzenberg, at its creative helm?
The answer to that seems to be that Quibi’s management fundamentally doesn’t understand the mobile ecosystem — or, specifically, how to win on mobile.
Content doesn’t win on mobile; content is mostly seen as a commodity by users, who have become acclimated to freemium experiences that provide some basic level of app functionality for free. Switching costs on mobile are minimal if not wholly nonexistent: users can capriciously flit between apps and app content because the app economy is dominated by the freemium model. This is true broadly across the app economy but especially so in ferociously competitive categories like mobile gaming and video streaming. A new entrant to a crowded category can’t capture market share on the promise of quality content alone: challengers need an auger with which to penetrate the petrified protective shell of a mature market segment. On mobile, that auger is performant, direct-response user acquisition.
In surveying the ads that Quibi is currently running, it becomes clear that Quibi sees the quality of its content as the primary means by which it will amass a large user base. Contextually lacking, these ads showcase the specific content available on Quibi in a way that doesn’t motivate the user to care much about the app that hosts it. Quibi is mostly running ads for shows that users don’t know anything about; in an environment in which content is seen as a free commodity, consumers price the value of any given piece of content at $0.
But paradoxically, while a consumer might value one specific piece of content a $0, the perceived value of aggregated content can be compelling. What Quibi should be focusing on is its catalogue and the feature that differentiates its product from the rest of the category: that all of its shows can be consumed in 10 minutes or less (Quibi stands for Quick Bites: all of the content on the service is short form). That many were surprised to realize that its name contains clues about the length of Quibi’s content underscores how little emphasis the company has placed on its differentiated content format versus the underlying content itself.
Quibi is engaging in a branding exercise for content that consumers inherently don’t value. Instead, Quibi should be focusing its user base growth efforts on the service, with a distinctive short-form content format and a Hollywood icon driving the creative vision. The sales pitch that Quibi is currently making is:
This interesting content starring a well-known celebrity is available to you!
But that sales pitch isn’t unique; it’s true for all streaming platforms. Why should I download Quibi? All I’m being sold on is a particular show.
Instead, the sales pitch that Quibi should be making is:
Our service features a large catalogue of content curated by Jeffrey Katzenberg, and each individual piece of content can be consumed in 10 minutes or less!
This sales pitch is distinct: it promises not just a singular piece of content, which consumers value at $0, but an extended timeline of high quality entertainment in a differentiated format, which consumers value richly. And of course, the second sales pitch is best made via direct response advertising, measured via app installs and ultimate engagement — not the branded approach of the first sales pitch, which necessarily is measured in the kind of awareness that tends to not result in app installs.
To launch its streaming service, Quibi appears to be using a feature film marketing playbook: build an audience by dazzling them with the promise of incredible content. Mobile is a different ecosystem with different rules; consumers are spoiled for choice with mobile streaming services. Participants win on mobile by being the best at distribution.