Quibi's Having a Rough Go

From the Wall Street Journal:

Quibi entered the market with big financial commitments from advertisers, enviable access to cash and two brand-name corporate leaders from the worlds of movies and technology. Its promise of a new storytelling format and Quibi’s deep pockets proved irresistible for many stars. The vision was to create short programs, 10 minutes or less, that people could watch on the go.

Quibi literally could not have launched at a worse time. It’s entire reason for being is to be consumed in the in-between moments while people are on the go. Except, for much of the last three months, no one has been going anywhere.

Quibi at CES / © Jason Aten

There’s also the reality that the content on Quibi isn’t very good. It just isn’t.

You can blame the first problem on the pandemic. The content problem, however, is squarely on the quixotic streaming company that never quite convinced the world that it needed 10-minutes-or-less “quick bites,” as the name stands for.

That isn’t to say it didn’t have a fighting chance. The company raised over $1.75 billion in funding. It planned to spend more than $300 million of that on content. But you can’t buy your way out of a bad idea.

At its current pace, Quibi will sign up fewer than two million paying subscribers by the end of the app’s first year, a person familiar with its operations said, well under its original target of 7.4 million. Quibi’s app download numbers have been falling in recent weeks, according to analytics firm Sensor Tower. Daily downloads peaked at 379,000 on its April 6 launch day but didn’t exceed 20,000 on any day in the first week of June, according to Sensor Tower.

Look, there are really smart people behind Quibi, on both the content and technology sides. Meg Whitman, the CEO, is about as experienced as you can be at running tech companies. There are few people with more content credibility than Jeffrey Katzenberg. When I met with the heads of the content and technology at CES in January, I was impressed by their demo.

The problem is, no one is impressed with the content, and no one is sitting on the subway or standing in line at Starbucks for 10 minutes right now.

Apple TV+ Is Shifting Away From Original Content and It Could Help It Win the Streaming Wars

It’s really not going out on much of a limb to say that Apple’s streaming service is a bit behind the game. Sure, it has more subscribers than Hulu. Of course, very few of them are actually paying for the service since Apple gave it away to anyone who bought one of its devices after the November launch last year. Finding paying customers, however, is sort of the reason you spend lots of money creating content and launching a new service.

Some of that content happens to be pretty good. The Morning Show earned a small handful of award nominations, and for good reason. Dickerson is quirky, but genuinely entertaining. The rest of the lot is curious, but no one is calling it poorly made. That’s because Apple spent plenty of money on original content in a play to take on Netflix, Hulu, and Disney+.

That strategy, however, hasn’t exactly gone the way the company likely hoped. If you need proof of that sense, look no further than the fact the company is now adding classic content to supplement its existing library.

Honestly, there’s probably more than one reason for the shift. And, it is a shift. Tim Cook had previously said “it doesn't feel right for Apple to just go out and take a rerun,” when asked why the service didn’t try to get Friends. Instead, what used to be Netflix’s most popular show is coming to HBO MAX when it launches next week.

Now, however, things are different. Now the company is reportedly getting out its AppleCard and spending money on licensed content.

One reason is that original content isn’t really a thing right now. At least, not the big-budget, high production value shows and films Apple was making. All of those productions are on hold due to the coronavirus pandemic, and there’s only so much finished work in the pipeline before you have to figure out a different strategy.

Here’s the thing, Apple absolutely could dominate streaming video with the right content library. Disney+ is the runaway winner right now, with 55 million subscribers, half of whom signed on during the pandemic. And Disney clearly has what is arguably the best content library of any media company. But imagine if Apple started licensing everything else that was up for grabs. And it could.

I mean, let’s be honest, Apple has an enormous amount of cash it can spend on building up a content library—far more than Netflix or Disney or anyone else entering the fray. Apple could just buy a Netflix or a Disney if it wanted to. Especially Disney, especially right now.

Disney’s market cap is a bit over $200 billion as of today. Apple could cover that with cash alone and still have enough left over to save for more than a few rainy days.

The point is this: If Apple is serious about dominating streaming video, it has a lot of control over it’s own destiny. It will, however, have to make a shift in strategy, and maybe even swallow a little pride. That said, it appears Apple is playing for keeps, which, when you consider the stakes, would make me very nervous if I were Netflix or Disney right now.