While millions of people where in lockdown due to covid-19 outbreak, ambitious people backed by industry giants were venturing around an idea of filling a gap in entertainment field. Quibi wants to help people in their idle time with short videos. But this startup is very different one. It raised $1.75 billion dollars and employed more than 200 people before product launch. While many may expect a new frontier in industry but debut was deeply disappointing. In this article we are looking at streaming startup named Quibi which provides customers with short form contents.

What is Quibi?

The app, delivering television and news programming in 5- to 10-minute segments, was built to be viewed on the move by people too busy to stop and view TV shows or videos. This started out as millions of residents didn’t travel out thanks to country-wide lockdowns.

The platform will deliver videos and shows with each episode around 10 minutes. The packages fell into three major categories: chapter-released films; documentary and unscripted reality shows; and news and sport stories from Famous media like ESPN, BBC and NBC. Fifty shows released on debut.

Quibi streaming startup
Quibi streaming startup

Mr. Katzenberg and Ms. Whitman made their pitch on January, presenting it as on-the-go break for someone waiting at Starbucks or taking the subway. The pandemic has changed the situation. With new consumers mostly limited to their houses, it can now make them compete to existing channels such as Netflix and Amazon Prime Video that can be viewed on any device, even TV in the living room. However, streaming startup is solely a cellphone based platform.


Jeffrey Katzenberg former head of Disney studios and dreamworks SKG co-founder and Meg Whitman former executive at Disney, dreamworks, ebay and HP are great names in global business who co-founded Quibi.

Founders of streaming startup Quibi
Founders of streaming startup Quibi, Cannes Lions 2019/Richard Bord

Buisness Model

Under lockdown circumstances, Quibi declared it will be free for three months. After this, users would pay $4.99 and $7.99 a month, the latter is without ads. The streaming startup business model considers people infinite desire for amusement.But its features like being short-form, smartphone-only, paying subscription requirements ignores usual preference of users. People who accustomed to free exciting, endlessly updating and growing fun on demand and on phones via YouTube and TikTok. As Goodman, a media Analysts adds:  in an environment where the consumer needs to have power of consuming stuff with multiple choices, Quibi stripped away most of it.

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Streaming startup Business Model
Streaming startup Business Model

Founders probably have thought that despite YouTube contributors in every minute make about 500 hours of new content the quality of their work is mostly low. Then, if we make partnership with Hollywood studios and provide high quality content it will attract consumers even with low number of products. But the result is producing videos with cost of $100,000 per minute. Thus, we see they are betting on an expensive value proposition in an industry that its customers taste is not predictable. This means losing competition from both quantity and quality aspects.


According to the Sensor Tower, a research company, the app dropped from the top 50 most downloaded within a week of its debut, it only gained over 1.5 million active users by the end of May. Although it performed better in recent months, it is still far below relative to over 50 million Disney+ members released in December 2019 and Netflix’s massive 183 million worldwide customers. Another thing is that some of those customers were on free trial plan, ended previous month.  Downloads were so low despite a lineup of producers and stars like Jennifer Lopez, LeBron James, Idris Elba, Steven Spielberg and Chrissy Teigen. The firm expects reaching only 2 million paid users by end of 2020, fewer than 30% of the 7.4 million target.

ios app stats
ios app stats


android app stats
android app stats

The Startup Challenges

Revenue stream: Commercial partners such as Anheuser-Busch, Taco Bell, WalMart and Pepsi tried to restructure their deals with the streaming startup because of both pandemic impacts to their company and low performance of Quibi.

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Human resources: many notable employees quit the streaming startup over the last year. This includes Janice Min, former co-president of The Hollywood Reporter-Billboard Media Company; Diane Nelson, former executive of the Warner Bros.; and Tim Connolly, former executive of the Hulu Corporation. Mr. Katzenberg and Ms. Whitman are considered to be exacting administrators, who hold an eye on the slightest information. Steve Glaveski considers some defects in this style of leadership like irresponsibility or arrogance which are noteworthy but I think there must be more information than we have now to judge someone way of management.

Patent infringement accusation: Elliott Management is decided to fund a lawsuit filed by tech company Eko. Dispute is about “Turnstyle” key technology which enables content to flow seamlessly back and forth on cell phone from portrait view to landscape.

The main problem: It is not a startup at all!

How many times have you heard about $1 billion fundraising in first and $750 million fundraising in second round? The numbers are too far from averages. According to techcrunch, even after increase in volume of fundraising in recent years, the average of funding in first three rounds of seed, A and B are $5.6 million, $15.7 million and $30.7 million respectively. Numbers that are not even close to what happened at Quibi.

Although lack of money is always one of the startups’ challenges but lots of it, is another kind of challenge, too. Too much money emerges the risk of wasting it and trying to covering the solution-problem and product-market fit by advertising on Super Bowl or Hollywood party with 1500 guests. However, 68 percent of last month’s Hollywood Reporter/Morning Consult poll participants said they did not identify the company. To Test your product through prototyping is low cost solution for every business. Remember you are the one that should conform with customers, not vice versa. So test your product more and more till at final launch, you propose something that customers really want.

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The Achilles heel of founders is exactly what seemed to support them. They could fund huge volumes because of their professional experience but working in industry giants keeps them away from needed culture to manage a startup. Employing 267 people before launching the product shows the founders’ habit to work in space of big things. Big numbers and big partners are examples of it. I don’t think that giants are created suddenly; they are formed in years instead.

Does it mean the streaming startup will fail finally?

Despite all challenges, there is a silver lining (and may be more than one):

  • Eighty percent of Quibi’s subscribers end the episode they watch;
  • They have planned to cut the marketing budget;
  • Executives are going to take the app to TV by negotiating with Amazon Fire and Roku;
  • Developers are going to add possibility of sharing its content through social media platforms.

One solution may be using young talents who are out of Hollywood studios to produce contents. There are many people out there that may not have experience making content like a pro but they can still strike gold. Remember that many famous Hollywood directors once were an independent and unknown one. Their engagement will have two promising results. To increase quantity and variety of contents while saving quality near the ideal one.

Again the main risk lies on managers’ attitude. Should they trying to continue being perfect, trying to create a streaming giant in a moment, the end of Quibi may be too close.


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