Documentary Business

Peter Hamilton Consultants, Inc

Quibi: $1 Billion for Short-form Content. Watch the Pitch. Why I Think It’s a Long Shot. Lessons from CBS Cable, Discovery and China’s TikTok

Quibi is showing up in my conversations as an active buyer that is outbidding legacy networks.

The ‘Quibi’ brand name does not refer to a Vietnamese appetizer: It is short for ‘quick bites.’

Funded by Disney, Alibaba, Comcast and others, it is a video streaming venture run by corporate heavyweights Meg Whitman (CEO) and Jeffrey Katzenberg (founder and chairman.)

  • By the end of its Year 1, Quibi plans to create 5,000 x 10+ minute original programs.
  • The short-form content is formatted for mobile and online platforms where traditional 30-minute and longer formats are not as compatible.
  • The great majority of the $1 billion spend is for scripted programs provided by leading Hollywood talent.
  • Lifestyle, Reality and documentary content are in the mix.

Vision Thing

Here is a link to a compelling Bloomberg video interview with both Katzenberg and Whitman.

Meg and Jeffrey, May I introduce Bill and Babe…

  • Reading about Quibi, my mind wandered through the decades.
  • One of my first assignments when I started work at CBS in the ‘Eighties was to help sell off programs created for CBS Cable.
  • CBS was at the time the dominant “Tiffany Network.”
  • CBS founder and chairman William S. Paley had decided to make a play as a cable network operator.
  • Babe Paley, the much-loved and beautiful New York socialite and benefactor was said to have shaped her husband’s decision-making.
  • CBS Cable was packed with original programs about the ‘lively arts’ and covered such topics as the ballet, grand opera, Broadway and more.
  • Many of the productions were budgeted at broadcast standards rather than the costs afforded by a new distribution platform.
  • Gaining little traction with cable operators but at enormous cost, CBS Cable closed in December 1982, after 14 months operation.
  • There were few buyers for the archive.

Discovery’s Model

  • Only three years’ later, Discovery Channel launched with a different model;
    • Buy very cheap
    • Throw it against the wall
    • See what sticks
    • Invest in the winners.
  • Discovery’s programmers soon found that sharks stuck. So did big, authentic characters, like Aussie naturalist Harry Butler.
  • With the knowledge acquired from the audience response to low-cost acquisitions, programmers began investing in originals.
  • By testing the programming and promotional elements that resonated with cable subscribers, Discovery soon became a giant among Unscripted networks.

The Target

Quibi’s Flaws

  • Discovery benefited from scarcity: It was the only factual-specialist channel during its launch days.
  • Quibi is launching into a Wild, Wild West where consumers enjoy bazillions of video options that they can experience on dozens of devices.
    • I learned this week at the Beet TV Conference that CNN counts 68 possible touch points with consumers, from old fashioned TV’s through mobiles to satellite radio.
  • Quibi is investing heavily in originals without going through the testing phase.
  • Most of Quibi’s fast-tracked original programs will not be home runs, or even base hits.
  • And the occasional hit will not sustain a business that is dependent on originals.

A Lesson From China’s TikTok

  • TikTok is an app that supplies super-short (10 seconds and up) videos of everything from make-up lessons and goofy dancing to football highlights, often set to music.
  • It is mainly user-generated content in a mobile-friendly format.
  • The TikTok app hit a viral nerve, rapidly passing more than 1 billion downloads worldwide.
  • TikTok carried its parent company to a valuation of $75 billion, and is rapidly emerging as a challenger to Facebook.
  • Read the NY Times’ coverage of TikTok here.

My Final Takeaway

  • In the Wild, Wild West of digital and increasingly mobile video, the model that is the least likely to succeed is the one that tweaks the old studio and Cab / Sat model, borrowing established creative talent at relatively great expense, and all for a new short format that will be delivered across multiple platforms.
  • Verizon lost more than $1.2 Billion on its abandoned Go90 platform — a similar top down fantasy from executives stuck in the pre-digital video era.
  • Good luck, Quibi!
  • And read more from top analyst Colin Dixon