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Does Quibi’s Business Model Miss Its Target Audience?

by Nitesh Patel | 1月 09, 2020

Yesterday, at CES 2020 in Las Vegas, further details about, Quibi, a premium short-from, smartphone video service, were unveiled by its founder, Jeffery Katzenberg, and chief executive, Meg Whitman. Strategy Analytics published a report about the prospects for Quibi, in September 2019 - “Quibi: Home Run or Swing and a Miss?”. A few additional details about the service have emerged.

  • Service launch: In the US on 6th April 2020. Strategy Analytics will be monitoring its uptake and usage trends of Quibi among its AppOptix panel, particularly among T-Mobile USA subscribers given the partnership between Quibi and T-Mobile.
  • Features: A feature called “Turnstile” allows videos to run across the entire screen whether in portrait and landscape mode. Turnstile has enabled some producers to change the point of view of the video when the screen orientation is changed, e.g. the traditional viewer perspective in landscape mode but then from a characters perspective when in portrait mode. Meg Whitman, indicated over 100 pitches from content makers seeking to use the technology.

                                           Quibi Logo
Strategy Analytics continues to believe Quibi is treading a fine line between potential success and failure. Quibi is clearly a unique proposition compared to Netflix, Amazon Prime Video and other SVOD services, and is supported with content from big name directors (e.g. Spielberg, Tarantino) and stars (e.g. Zac Efron, Idris Elba, Kristen Bell, Chrissy Teigen) designed to lure fans. But will 10 minute episodic content format on a mobile device hook users and also bridge the divide between two needs, immersive entertainment and killing time? Furthermore, while Strategy Analytics believes $5 is at the upper end of the sweets spot for premium mobile video services, competition for subscription dollars continues to intensify with Disney and Apple launching streaming services during 2019; and not to forget established competition from Netflix. Without a freemium or bundled offering it’s difficult to see how Quibi is able to demonstrate its value to its target audience. Even free, ad-funded, short-form video services have failed to gain major traction, e.g. Verizon’s ill-fated go90 a good example. In Strategy Analytics’ view key questions still need to be addressed:

  • How many consumers will pay for a short form VOD service available exclusively on mobile phones?
  • Which viewer segments are most interested in and willing to pay for premium short-form VOD? What types of content are they interested in?
  • Is Quibi positioning itself correctly in the marketplace?
  • How can wireless operators take advantage of the potential Quibi offers?
  • Will Quibi’s plans for operator-exclusive distribution maximize revenue and profitability or would multi-partner distribution be a more effective business strategy?
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