Quibi’s Struggles, Remote Work Dogfooding

Quibi’s Struggles
An interview with Quibi co-founder Jeffrey Katzenberg was published in the NY Times yesterday. Even if you didn’t read it, you probably saw a quote from him, which went viral, stating he blames their launch struggles on COVID-19.

It did seem an odd quote, and as many people rightly pointed out, on paper, it seems there was no better time to launch an entertainment service. With millions of people sheltering in place, and content hubs like Netflix, HBO, Amazon Prime, etc., all-seeing tremendous growth in content hours consumed, you would think a new offering from Quibi would at least generate some interest.

Playing devil’s advocate, one could argue the behavioral habits that are the basis of Quibi’s strategy, meaning people who are pressed for time and want entertainment snacks, does not exist right now. The current environment COVID-19 presents with the shelter in place seems to fit better long-form content, not the short form type Quibi is based around. Quibi’s value proposition in content assumes you have less time rather than more time. The current situation we find ourselves in offers more time for most people rather than less.

That being said, I agree with the overall sentiment that if any time was actually a good time to launch a new entertainment service, it is while millions of people shelter in place in their homes. Another challenge facing Quibi is one of budget. While only $4.99 a month for a subscription that includes ads ($7.99) for ad-free, every bit of available research I’ve seen indicates, 3-4 media subscriptions is about the limit for most consumers. And given the ripe time for media services, it seems that 3-4 limit may currently be hit, and there is little to no available budget left for something like Quibi.

The broader issue, however, is the content just isn’t compelling. And I find that true in several ways. Firstly, I personally find it hard to tell engaging stories in the format Quibi has chosen. I have a sense I’m not alone. To my point about budget, if there was a must-see piece of content in Quibi, then I sense more people would have at least tried the service. With roughly only 3.5m people even trying the app and less than half that remaining as active customers (per Katzenberg’s remarks), it seems there was not much compelling content to pull people in overall.

I could do a full analysis of what the patterns have been for success in direct to consumer entertainment, but that is for a later analysis. In short, Quibi has little to none of the things that have driven successful D2C content going for it at this time, and if they didn’t have any of the core elements in place at launch, then it will be harder to find them going forward.

The last point I’ll make here is it seems Quibi’s vision was that young people want to consume content differently. And while that is true, Quibi seems just to be trying to repurpose a traditional Hollywood template into some elements that are designed to capitalize on the trends of how young people consume content. This whole strategy from Quibi feels like the kind of thing you get when management consultants do research and tell you this is what consumers are doing but yet have no real insight as to why the market is doing what it’s doing. It looks good on paper but fails to capture the true needs of the market.

Many had hoped Quibi was a re-invention or innovation on the idea of original content. Still, the market response today suggests they have a lot of pivoting ahead if they want to meet this vision.

Remote Work Dogfooding
I like this tweet from Benedict Evans, and it echoes something I have been saying since the work from home mandates started coming in.

What is most interesting to me about this observation is whether these apps will come from big companies or small ones. No doubt, software engineers everywhere are using the tools from the likes of Zoom, Microsoft, Google, etc., and seeing all the gaps in their offerings.

In recent conversations I’ve seen from venture capitalists, they are seeing an increase in pitch decks from startups looking to plug some of the holes in the offerings from the big software companies. But the debate will be if the startups can outrun the big companies.

At the same time that entrepreneurial software engineers see the holes in common productivity and collaboration software, so are the masses at companies like Microsoft and Google dogfooding their solutions and realizing they have gaps as well. Internally, I’m sure there are a host of feature requests for the dominant suites of Office and GSuite in the modern enterprise.

I view this as a fascinating race. While it is a general known that startups can move faster than the large tech companies, startups have to swim upstream in much fiercer waters against the incumbent productivity suites from Microsoft and Google.

With more companies now starting to embrace remote work, and my hunch that remote work becomes a normal part of the workforce than before, the tools we use and rely on for productivity and collaboration may be in for a wild ride of innovation. This space, in a matter of months, got much more competitive.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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