Sounds like Quibi, right?
But the current flood of explanations leaves us wanting. Indeed, what did those “people of importance” actually do wrong? Surely, blowing almost 2 billion bucks of other people's money in 18 months cannot be the result of something incidental. Rather, it must be something both fundamental and epic. Let’s start there.
First, CEO Meg Whitman seems to have put a grand vision before real consumer need. You’ve got to be damn sure of yourself to abandon fundamentals, but run around New York with a billion-dollar checkbook, and everyone will tell you how brilliant you are.
Founder Jeffrey Katzenberg is noted for challenging bureaucracy and succeeding. This kind of attitude results in spectacular wins (and losses), but there is a difference between Quibi and the movie “Shrek,” his landmark producing success. That is, “Shrek” was a great story, amped up by slick tech. Quibi, by contrast, was an attempt to create a whole new kind of storytelling, and a channel to go with it: double jeopardy.
Quibi was built on the idea that consumers would want quality short-form video content on their phones, be willing pay for it with a subscription, and watch ads.
It seems simple. The product sucked. Nobody bought it. The company imploded. Spit, spat, spot.
But warnings were abundant.
At the time Quibi launched, consulting giants warned of “subscription fatigue.” Publishers were falling like troops at Normandy. Gaming and social apps were sucking up all the oxygen.
Quibi’s strategists may have thought they were competing for share of subscription dollars. More realistically, they were competing for attention across the entire spectrum of entertainment and information opportunities on mobile screens -- that is, all publishers. That’s a hardscrabble playground.
According to an article in The Atlantic, at about the time Quibi was launched, “so many media companies [had] reoriented their budgets around the production of videos that the so-called ‘pivot to video’ [had] become an industry joke. Today, the pivot seems less like a business strategy and more like end-of-life estate planning.” Apparently, pre-audience, Quibi principals thought they would just wade right in to the snake pit. Were they planning on clicking their heels together three times?
Of course, leadership was not operating in a vacuum. Most major studios were investors.
Here too, there was opportunity for trouble. Big collaborations among competitors are fraught with peril. Look at Epoch, the primordial mobile OS. Almost every phone maker invested in it. Ever heard of it? Big shots will join a syndicate simply based on FOMO, but if one party appears to be getting more than the rest, the entire scheme can unravel. Remember Apollo the measurement system? Kraft and Starbucks? McDonald's and Heinz? Nobody?
In the end though, lack of demand is what killed it. How could Quibi have foreseen that? The same way everyone else does: research.
With all that cash, and the sum of all content development companies, Quibi certainly had access to the best resources for research. It must have either been ignored, or been deeply flawed.
And don’t blame the pandemic. Netflix stock almost doubled between March and October this year.
Why didn’t one of the 10 brand customers, who collectively pre-committed to $150 million, just do the research? It would seem obvious to do a little consumer testing before going into something so speculative. It was, as a consumer play, in the sweet spot of all those advertisers. Still, it depended not on the popularity of a given bit of content, but on consumer behaviors changing. Advertisers should have known how to make that call.
And then there’s the basics of product development. Any qualified product person will drive toward value creation in small steps, each targeted at preventing overcommitting on an idea. “Fail small” is gospel. Were any of the precepts of Minimum Viable Product manifest in this mess? It’s like they missed an entire section in the bookstore.
And who paid? You did. In your Disney+ subscription, in the price of your deodorant, in your 401k valuation. And who will be held accountable for what amounts to a classic con -- selling hope -- without any real substance underneath the claim?
Whitman herself once said (regarding her stint at eBay) that “I should have listened to my intuition.” The tragedy is, that may be exactly what she did at Quibi.