Streaming video has become a major part of the offerings from major mobile providers.
AT&T offers HBO and WatchTV to its subscribers for free, while T-Mobile offers Netflix and next year, a new service powered by Layer3 TV. Verizon has offered a subscription to Apple Music.
For the mobile giants, it's about value, providing a compelling package of content and service that makes users willing to switch carriers or stay subscribers. For the streaming companies, the deal provides scale, potentially adding millions of users to their services, even if they were acquired at a bulk discount.
Now, a new entrant into the streaming fray is eyeing that bundle as a part of its business plan: Quibi, the streaming service founded by Jeffrey Katzenberg and being led by Meg Whitman.
Quibi is planning to have both ad-supported and ad-free offerings, but it is also looking to mobile carriers as a way to quickly scale up.
Speaking at an event hosted by Variety this week, Whitman confirmed that the company was interested in cutting deals with one, or multiple, carriers to offer their service (presumably the $5 per month ad-supported tier) to their customers.
Sahil Patel reported that the company ultimately hopes to derive between 60% to 70% of its revenue from subscriptions, both direct from consumers and those sold through intermediaries, like a mobile carrier.
It’s an unusual strategy for a new OTT entrant, but Quibi -- which has raised $1 billion from investors that include almost every major media company -- is not launching small. By being bundled to every subscriber of say Verizon, Quibi would have low-friction access to more than 150 million people.
Quibi is also in the process of ordering and shooting thousands of original shows ahead of its launch, slated for sometime in 2019. The company is not currently interested in acquiring libraries of shows, although it may use IP from some of its investors in its series.
“The biggest challenge is the volume of content,” Katzenberg said at the Variety event. “It’s a tall order to do this in the next 12 months, but that doesn’t mean we are not going to try.”