Why is Quibi holding $1.75 billion doomed to fail fast?
A product, a collection of astronomical amount of financing, enjoy the reputation of the industry sector of the founding team, first-class products and content production team and so on various Dolly good factor, its fate will be?
Quibi, a streaming short video platform, gave an atypical answer to this question, which is "quick death."
In April of this year, Quibi was officially launched in the much-anticipated manner, and raised nearly US$1.75 billion before it went online. But Quibi, who was born with a golden spoon, failed to achieve the goal of rapid growth. After only 6 months of survival, it officially announced the shutdown of the service on October 21, selling technology and produced content.
Quibi's sudden death shocked the European and American content media circles, and there were many reports in China. But in fact, its failure is not without trace. This issue of Quanmeipai (ID: quanmeipai) counts the 6-month history of Quibi from its birth to its demise, and counts the top ten reasons for its failure, hoping to provide ideas for the future development of the short video platform.
"Debut" is the peak
Quibi focuses on original short dramas with a single episode of 5-10 minutes. This form is different from products that use UGC or small MCN-generated content as the mainstream products, but is closer to Netflix, both of which abandon the user-made model, and all content is purchased or produced by the platform. In contrast, Quibi is more adapted to fragmented usage scenarios, and content production costs are not lost to Netflix. Most of Quibi’s financing is used for drama production. In addition to cooperating with top creators like Spielberg, a large number of Hollywood directors and producers are also Quibi’s content partners.
In the words of its founder, “other video platforms produce content at a price of US$100 per minute, and we are producing content at a price of US$100,000 per minute.” It is also because of this, long before Quibi was officially launched, many Media executives look forward to its appearance to rekindle users’ enthusiasm for high-cost short videos.
The high investment in content has indeed given Quibi some rewards, such as nomination for mainstream awards such as Emmy Awards. However, doing long-term content platform business and short-term filming are indeed not the same thing. Combined with Quibi’s ending, its content-based strategy has not been implemented well, or it has not been transformed into competition in the market. Advantage.
Speaking of founders, this is another reason Quibi has gained widespread attention. As one of the founders of Quibi, Jeffrey Katzenberg was a senior Hollywood executive, the former chairman of Walt Disney and the co-founder of DreamWorks Animation, and the other founder, Meg Whitman, He is the former CEO of eBay and Hewlett-Packard.
Luxury founder lineup is undoubtedly a marquee name to help Quibi easy to get at Disney, Fox, Time Warner and other companies as much as $ 1.75 billion of financing, also received from advertisers such as Coca-Cola up to billions of dollars in advertising support. Similarly, in view of Katzenberg's extensive influence in Hollywood, Quibi also won a vote of Hollywood's top production resources.
In terms of product content planning, Quibi divides the content into three levels. The top level is a large-scale production series with the highest production cost, such as Spielberg's horror short film series "After Dark"; the middle level is a star reality show. The third layer is mainly news programs, mostly completed in cooperation with content agencies.
Quibi has also made innovations in the form of video presentation. In addition to the common vertical screen mode of short video products, when the user turns the phone horizontally, the video on Quibi will directly switch to the horizontal screen. This technology, called "Turnstyle", is not to crop the film and television footage into vertical or horizontal screens. Instead, two different shooting methods are used during the production of the drama series, and they are produced and produced separately. Optimization, the subtitles, title, and cast list in the video are all made separately. Thanks to this, the best viewing effect can be achieved no matter how the user holds the phone.
Support free switching between horizontal and vertical screens, picture source: Quibi download page display
However, with such a lofty vision of content production, Quibi only focuses on occupying the more limited use scenes of people in a day, such as waiting for coffee, waiting for the bus or commuting. As Whitman said, Quibi provides content services for people on the go.
In terms of business, Quibi adopted a "subscription + advertising" charging model. Pay $4.99 per month for ads and $7.99 for no ads. This price is cheaper than all streaming video platforms except Apple TV Plus. In addition, Quibi also adopted a 90-day free trial to attract new users.
At the beginning of the launch, the founder of Quibi hoped to reach 7.4 million paying users in one year, but the reality gave a rather cruel response: 6 months after the launch, Quibi’s number of users barely reached 400-500,000. Lower than expected, and this number also includes a large number of free trial users. According to the forecast of Sensor Tower, a mobile application analysis company, iPhone and Android users who installed the Quibi app have only spent $7.7 million on Quibi subscriptions since its release.
In any case, Quibi's failure was beyond most people's expectations. Although some commentators questioned its model, most people initially had high expectations for Quibi out of trust in the experienced and well-connected founder combination, and abundant capital. So, what made this product only survived for 6 months, and made the 1.75 billion financing bleak?
Counting Quibi’s "Ten Deadly Sins"
Quibi's failure has confirmed to some extent that the global short video market is nearly saturated. Although latecomers can try to find a product form and operation model that is different from the "front wave", they are still struggling. An article on the technology review site The verge titled "10 Reasons Why Quibi Completely Failed in Less Than a Year" summarized the reasons for the sudden death of this highly anticipated product within six months:
1. The content is not competitive
Although a large number of Hollywood producers provide materials for Quibi, and despite the team's determination to produce high-quality content, the paradox is that poor content is still the most obvious and most critical reason for Quibi's failure.
An entertaining streaming video product needs to persuade users to register and keep it, but Quibi is filled with too much mediocre content. These content comes from studios and self-media creators who sell their accumulated works for many years to Quibi.
On the other hand, although Katzenberg and Whitman have invested more than $1 billion in attracting Hollywood's top talents and production companies, they are still unable to produce truly high-quality, popular works. All this goes against Quibi's original vision of creating high-quality programming.
There are even comments that most of the content on Quibi is similar to the videos on YouTube, but the same type of content on YouTube is often better and free.
2. Failure to catch up with changes in consumption habits
Quibi started as a mobile app. For a long time, Quibi executives refused to adapt to the new situation, but they still made concessions to some extent, such as gradually increasing support for Apple AirPlay and Google Chromecast. , So that people can cast screen on TV. However, in this way, Quibi's proud Turnstyle technology is ineffective, and this technology is the only feature that makes its videos look unique.
As mentioned earlier, Quibi’s biggest usage scenario is actually people’s commuting period. However, shortly after the official launch, the global new crown epidemic broke out and a large number of potential users were trapped at home, which had a greater impact on Quibi's user growth. At this time, if it can change due to the situation, and quickly launch a service that supports TV playback, it may also be remedy, but it is ironic that it was not until the day before the official bankruptcy that Quibi updated its application for Fire TV and Roku set-top boxes. Features.
3. Weak social interaction
Perhaps due to anti-piracy needs, Quibi did not have a screenshot or screen recording function when it was launched, and users were unable to share screenshots or video clips on social networks. As a content platform, the lack of convenient sharing channels is a serious product flaw. It also shows from the side that the company’s leadership does not really understand the future of the entertainment industry based on mobile devices: it should not only focus on what people are watching, but also encourage They use social media to convert what they are watching into interactive content.
4. The payment model is not widely accepted
Quibi uses a subscription system, charging 4.99 US dollars per month, or 7.99 US dollars per month (no ads). This charging strategy seems cheap, but for short video platforms, it is slightly absurd. Whether it is on platforms such as TikTok, YouTube or Twitch, people watch videos for free. On long-term video platforms such as Netflix, Amazon, and Disney+, users pay for long-term shows and movies that have received much attention, which makes many people reluctant to spend money on Quibi for content. Previously, Quibi tried to test a free package fully supported by ads in Australia and New Zealand, but it was too late.
5. Inadequate marketing and promotion
Quibi also has a poor performance in marketing. It used to put an expensive 30-second advertisement in the "Super Bowl", but the effect was very poor. It didn't really say what Quibi was, but made people feel more confused. According to statistics from USA Today Ad Meter, Quibi’s advertising effectiveness ranks the bottom of the 62 Super Bowl ads. Moreover, Quibi's ads have never been spread on popular social platforms such as Instagram, Twitter or Facebook.
6. Contradictions among core managers
Before Quibi went live, there were already problems between founders Katzenberg and Whitman. According to the Wall Street Journal, Whitman had threatened to resign as CEO of the company because she discovered that Katzenberg’s authoritarian style had weakened her authority. In addition, the two founders don't seem to really understand how people use mobile phones, what people expect from streaming services, or why products like TikTok and Netflix are so successful. In an increasingly competitive market, it is difficult enough for a company to stand out. If the two senior executives of the company cannot work together, then success is almost impossible.
7. Lack of sufficient reasons for people to download
The question Quibi never wants to understand is: Why do people need Quibi?
Katzenberg and Whitman have repeatedly stated: "We are not competing with Netflix." But the reality is that Quibi is competing with Netflix and all other similar apps. In this case, Quibi does not have the rich content library owned by other streaming media or the social functions of other apps, and users have no reason to use Quibi. Streaming media services need to make people feel that they are essential to their lives in order to be selected and needed, but Quibi did not give people a reason to download.
8. Fierce competition for homogeneity
Streaming media services and social media products are not only competing for users' payment, but also hoping to win users' attention. If people have spent a lot of time watching Netflix, playing Fortnite, scrolling videos on TikTok, and posting news on Instagram, then some special measures need to be taken to divert their attention. But things are counterproductive. While Quibi is trying to attract more attention, the time people spend on the above apps (and websites like Twitch and YouTube) has grown rapidly. During the epidemic, people are not without free time when they are at home, they just don't want to see Quibi.
9. The core technology Turnstyle was sued
At the technical level, Quibi's proud trump card is Turnstyle-a technology that allows users to seamlessly switch between horizontal and vertical screens when playing videos on mobile phones. However, in Quibi's short life cycle, it has been facing a lawsuit initiated by the technology company Eko over Turnstyle. Although this lawsuit itself may not directly lead to the collapse of Quibi, the legal challenge to its key technology that has to be dealt with is adding fuel to Quibi's poor situation.
10. Product vision is at odds with user needs
This point cannot be emphasized enough, that is, Quibi designers never know what Quibi should be, what users want, or how people use their phones. Quibi's existence is based on the idea that people want high-quality short video content every day, but executives are arrogantly unwilling to admit that people have been getting these short video content for free for years. Quibi failed not because of TikTok's existence, but because executives refused to consider TikTok as its biggest competitor. Quibi didn't try to understand and learn about apps that people spend hours using every day, but rather proudly said: "We are doing something different"-even if no one is particularly interested.
Rethinking: Looking at Elite Entrepreneurship from the Rapid Deterioration of Quibi
Quibi, who was born with a golden spoon but has a life span of only 6 months, has become one of the shortest streaming media short video platforms so far.
Quibi is not the only example of how difficult it is to make high-end short video models work. In February 2016, YouTube launched the first batch of original shows and movies, but only allowed users who paid $10 a month to subscribe to YouTube Red to watch. In 2019, YouTube announced that it will premiere original programs on a free platform. Since then, both YouTube and Facebook have given up their original production ambitions, and have given up productions that cost more than reality shows and documentaries.
But it is worth noting that the demise of Quibi does not mean that the death knell for high-end short videos has been sounded, although the results show that this business is indeed a challenge.
Looking back at Quibi's failure history, the most important inspiration is that the more senior people in the industry, the easier it is to fall into the trap of "professional" and ignore the issues that ordinary users really care about. The Verge bluntly stated that the main reason for Quibi’s failure was actually “it was because the management had a serious misunderstanding of Quibi’s positioning, which led to its inevitable rapid downfall.” 69-year-old Katzenberg and 63-year-old Whitman Their field of expertise was once invincible, but it was precisely because of this elite arrogance that they ignored the real needs of users.
Two important founders, picture source: Quibi official website introduction
How many users want to flip their phones frequently while watching videos? How many users can adapt to watch a full-length movie in a fragmented manner of "9*10 minutes"? How many users can bear to see highlights but cannot share them with friends on social media?
Obviously, the two founders may not have thought about these issues, did not understand and did not try to understand the real needs of young people. After all, Katzenberg still asks his assistant to print important emails on paper to read. When Whitman was asked by the media about his favorite TV series, the answer was "I am not very keen on entertainment."
When the star halo fades, what is left is a fuzzy product. Faced with the increasingly popular short video competition field, the result will of course be a dead end.
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