Jeffrey Katzenberg expected Quibi to be a global hit. If you don’t know what Quibi is, don’t worry. Most people don’t. And that right there is the problem.
Quibi is a streaming app that features short, five- to 10-minute videos for people on the go. It launched in early April with an impressive lineup of celebrities, including Jennifer Lopez, LeBron James, Chrissy Teigen, and Idris Elba. But it never really picked up steam, and Katzenberg, the app’s founder, blames the coronavirus.
“I attribute everything that has gone wrong to coronavirus,” he told the New York Times. “Everything. But we own it.”
In theory, the shutdowns should have helped Quibi’s launch. Streaming services are being used more than ever before due to the economic shutdown and shelter-in-place orders, and smartphone screen time in particular has skyrocketed. So, a service that brings entertainment directly to your smartphone when there’s little else to do should have been a success, right?
Well, not really. Quibi quickly fell off the iTunes most-downloaded list, and the company says it only has about 1.3 million active users.
Quibi isn’t the only streaming service experiencing growing pains. NBC Universal launched its long-in-the-works streaming platform, Peacock, to some cable subscribers in April and plans to release it to the rest of the public in July. But that public launch might need to be delayed, according to company executives, who are worried that the postponement of this year’s Olympics, of which NBC was to be the exclusive broadcaster, has created serious marketing setbacks.
“There’s no way to sugarcoat it: It’s a big blow to the success of the launch,” said Dan Ives, a managing director at Wedbush Securities, which has ties to NBC Universal. “The Olympics coverage was a big piece of the magic formula.”
WarnerMedia is also set to launch its new streaming platform, HBO Max, toward the end of May. The company’s chairman, Bob Greenblatt, told executives during a summit last week that WarnerMedia hopes to have 50 million U.S. subscribers by 2025, according to Variety. But given the current circumstances and the sheer volume of already available streaming services, Greenblatt admitted that “there’s a ceiling” that wasn’t there before.
HBO Max and Peacock, however, have an advantage that Quibi does not: They have the backing of a major corporation. And this has made Quibi’s recent failures even more painful.
“If we knew on March 1, which is when we had to make the call, what we know today, you would say that is not a good idea,” Katzenberg explained.
“There’s an outright war going on between streaming players,” Ives told the New York Times. “We’re not measuring ourselves necessarily on what happens over the next couple of months. We really believe this is a long-term strategy in the market.”
