Documentary Business

Peter Hamilton Consultants, Inc

Quibi: Collapse was in its DNA!

Quibi was destined to fail.

I was sure of that when I first read the presser announcing the business plan.

There must be deep psychological reasons why retirement-age industry titans can even begin to fantasize about succeeding in mobile video — a medium that targets 10-20 yo’s with goofy dance videos shot in their Covid basement getaways.

And we could dig into Hollywood’s caste structure to explain why a collective investment of around $1.8 Billion in Quibi’s doomed model anticipates how the studio establishment is now getting whipped by Netflix.

Graphic retrieved from the Stream Hatchet

A Deeper Takeaway

  • Video platforms like Quibi that launch from a standing start face a high hurdle versus those that speed out of an existing online community.
  • Twitch is a mobile video service that is building viewer engagement. (See chart)
  • Twitch is now commissioning originals to target the user-generated video that built its audience.
  • SNAP is also successfully adding originals to its UGV base.
  • YouTube similarly evolved from UGV to launch an SVOD service that now commissions fully-budgeted documentary originals.
  • How could Quibi, a pay-only service that Katzenberg loved to describe as ‘premium’ compete with FREE services that deliver the video that the target demo most enjoys?

What does Quibi’s failure say about Disney?

  • Disney backed Quibi, but that loss is a blip compared with the Mouse’s bigger strategic challenges.
  • Covid has smashed Disney’s theatrical movie and theme park businesses.
  • The legacy channels, notably ESPN but including Nat Geo, are in decline.
  • They are a distraction as Disney management struggles to shift to a content-focused streaming model based around Disney+.
  • I’ll soon share more thoughts about how Nat Geo fits into this picture of a giant Mouse stuck for now in a glue trap.

Final thought

  • Just think of the impact of $1.8 Billion spent instead on projects addressing climate change or BLM!
  • (Update: I leaned on Friday that Quibi retains a cash reserve of around $345 million.)

Quibi’s $1.8 Billion Fiasco: Founder blames coronavirus, not flawed business model
May 12, 2020

Quibi is a dud, as I predicted.

  • Even with a free 90-day trial, the Quibi app has been installed by less than 3.5 million consumers.
  • It ranks #125 among free iPhone app downloads.
  • That’s behind Duolingo, the language app where I recently failed to learn much Swedish (“Hej, hej!”).

Founder and Hollywood mogul Jeffrey Katzenberg says in The New York Times (May 11): “I attribute everything that’s’ gone wrong to coronavirus.”

  • My January 12 critique of the deep flaws in the business plan nearly hit the bullseye.
  • I say ‘nearly’ because in January, Quibi’s investment was $1.4 Bn.
  • Today’s estimate is $1.8 Billion!

Read my analysis below:

Quibi’s $1.4 Billion to Nowhere. Questions for a Hollywood / Silicon Valley Mobile Video Platform
(January 12, 2020)

Quibi’s announcements about its April launch reveal an over-capitalized plan that runs counter to the prevailing digital video business model.

  • Quibi is the video streaming venture run by corporate heavies Meg Whitman (CEO) and Jeffrey Katzenberg (founder & chairman.)
  • It is funded by studios led by Disney and Comcast/NBC/Universal, as well as China’s Alibaba and other players.
  • Quibi committed $1 Billion to content, including documentaries and reality.

Following is my recap of the Quibi Plan and my Takeaways:


  • Short-form content
  • Formatted for mobile
  • Delivered via a mobile app
  • The great majority of the spend is for scripted programs provided by leading Hollywood talent.

Subscription Fee

  • $5/mo for the ad-supported tier
  • $8/mo for the ad-free tier.


  • 50-60 shows at launch
  • Up to 175 originals in Year 1.
  • They include “movies told in chapters,” “episodic, unscripted and docs,” and “daily essentials.”
  • The movie content is 7-10 minutes / clip
  • Other genres: 5-6 mins / clip
  • Quibi aims to launch 3 hours of content per day
  • Most will be “daily essentials,” meaning mainly news and information.

Target Audience

  • 18-34 year-olds

Tech Innovation

  • “Turnstyle” lets users toggle seamlessly between portrait or landscape mode on their mobiles


Hollywood Conceit

  • Jeffrey Katzenberg is a Hollywood corporate legend.
  • He is imposing a Hollywood content framework on the TikTok generation.
  • The heaviest mobile video users are kids who love goofy, “no-cost / low-cost” videos.
  • They share them on Instagram, Snap, YouTube, Twitch, and recently via the TikTok phenomenon, and its 1.5 Bn app downloads.
  • Quibi’s announced $7.5 Mn / cost-per-episode is a massive misspend for content that’s competing with a silly 15-second dance clip shot in a high school cafeteria.

Pricing: No “Free”

  • Disney + captured up to 25 million subscribers after launch by offering a free trial subscription.
  • Quibi’s Pay Only options don’t promote the sampling that can lead to engagement and subscription.
  • (Quibi later offered a free option.)

Limited Cross-promotion

  • The Disney+ launch offer was heavily promoted on Disney’s channels, platforms and tourist destinations.
  • Apple’s vast consumer customer base is a comparable rocket driving the launch of its direct-to-consumer service.
  • Can Quibi afford to buy that scale of promotion that it needs to be competitive?

Target Demographics

  • Quibi’s announced target audience is 18-34 year-olds
  • Industry analyst Will Richmond says: “That’s way too old. Quibi’s core target should be 13-20 year-olds, maybe even 10-20 year-olds. Smartphones are extensions of pre-teens’ and teens’ bodies; no other age groups are as attached. This is the mobile video generation!”


  • Quibi’s $1.4 Bn seems like a lot to throw around.
  • But if its natural audience is 12-20 year olds, Quibi will be waiting – and cashflowing – for a decade until the key demo has the disposable income to spend on a subscription service or appeal to advertisers.

And Then…

  • Lightning can strike, and its possible that Quibi will deliver a game-changing “House of Cards” or “Handmaid’s Tale” that defies the odds that I believe are stacked against the current plan.

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