Quibi is off to a messy start.
The streaming service, which offers mobile videos and series that are cut into segments shorter than 10 minutes, garnered a lot of attention when it launched on April 6. But the payoff has been muted, and the service’s growth is anemic.
Jeffrey Katzenberg, Quibi’s founder, told the New York Times on Monday that he attributes “everything that has gone wrong to coronavirus… But we own it.”
Yet Meg Whitman, Quibi’s CEO, struck a different tone when speaking with CNN Business Monday night. Whitman said she’s happy with the service’s performance so far.
“You have to remember, we’re a new brand with original content, a new tech platform that was built from the ground up,” Whitman said. “We came to market with no library, no legacy product and we’re starting from scratch.”
Quibi has roughly 1.3 million active users – a tiny base compared to more than 50 million Disney+ customers and 183 million Netflix users. And most of Quibi’s customers are in the 90-day free trial period. Afterward, the service costs $4.99 a month with ads, and $7.99 a month without. (Quibi is available only in the United States and Canada, while Disney+ and Netflix are global brands.)
Whitman, who is the former CEO of eBay (EBAY) and HP, argues that growth in the streaming world always takes time, going back to the early days of Netflix (NFLX) or Hulu – and finding an audience is decidedly more difficult right now.
“I know how hard it is to gain people’s attention, particularly in a pandemic,” she said. “But I feel really good about where we are, even though we’re five weeks old.”
Yet other streaming services have thrived with people being stuck at home. Netflix reported a huge bump in subscribers last month.
A difficult time to launch
As for Katzenberg, he told the Times that he’s unhappy with the company’s results so far.
“Is it the avalanche of people that we wanted and were going for out of launch?” he said. “The answer is no. It’s not up to what we wanted. It’s not close to what we wanted.”
Since it was announced, Quibi has been seen as a risky proposition.
Its sales pitch was different than most streaming services in that it offered easily digestible content that came with high production budgets, and all of it could only be watched on a mobile phone.
The company courted A-list talent like Steven Spielberg and Jennifer Lopez and raised over $1.75 billion in funding from investors like Disney (DIS), CNN’s parent company WarnerMedia and the e-commerce company Alibaba.
Quibi was ultimately meant to be a service for users on the go, which is a selling point that disappeared after coronavirus forced people to stay inside.
However, Quibi has other fundamental issues beyond coronavirus, according to Michael Goodman, director of TV and media strategies at Strategy Analytics.
“It’s not really unexpected that Quibi has a rough start,” Goodman told CNN Business. “Being a mobile-only streaming service was always a risky bet. I mean, most services are multi-platform and consumers have made it clear that they don’t want to be dictated to in how they watch entertainment. The coronavirus pandemic has only exacerbated the underlying issues that Quibi has as a service.”
Rocky start
Aside the pandemic, the service has hit other bumps since launching last month: Quibi’s content hasn’t received positive reviews, its head of brand and content marketing left the company just weeks after its launch and it’s dealing with a legal battle over “Turnstyle,” its rotating video technology.
Quibi called the lawsuit meritless. “As we made clear in our filing, Quibi’s patented Turnstyle feature is the result of the work from our talented engineering team,” a Quibi spokesperson said in a statement. “When a new product launches, these types of claims are unfortunately too common.”
So to say it’s been a rough start is an understatement, but it’s unclear if Quibi is suffering from the pandemic or if it’s suffering from being Quibi, according to Goodman.
“Quibi is the outlier in this pandemic among streaming services because other services have seen a boom lately. So is this a product that consumers actually want? That’s the question right now,” he said. “Time will tell if they can turn it around, and we might not know until the pandemic ends, but I believe they have a really difficult road ahead of them.”
CEO Whitman insists there’s a path forward.
“I think you’ll see nice, slow and steady growth as we head through the pandemic. And then maybe when we get to the other side of the pandemic, we’ll see some accelerating growth,” Whitman said. “That’s my expectation. I feel pretty good about that.”
