Quibi, we hardly knew ye…

Quibi’s demise reflects the tenuousness  of a streaming video category that’s sometimes thought of as a can’t-miss hotbed for next-generation media industry growth. It’s a lesson others before it have learned, too.

The news that the seven-month old SVOD service will call it quits represents one of the colossal failures – but not the only failure – of the modern streaming video era. Quibi’s shutdown follows similar disappointing conclusions for predecessors including NBCU’s Seeso, Turner’s Filmstruck and the before-its-time Joost, which failed to catch on even as other services thrived. One reason being cited frequently this week has to do with the state of the world beyond Quibi, and rightly so. The health pandemic surely took a toll for all the commonly mentioned reasons: It drew people toward the living room TV set and away from the mobile screen, it reduced moment-in-life interludes that might have been optimal for short content sessions, and it may have sent viewers in search of trusted “comfort” television at a time when Quibi was populated with unfamiliar originals.

But those same problems also confront other short-form video providers like TikTok and Snapchat, which remain in business and have continued to grow their audiences. This week Snap Inc., which delivers a slate of original, short-form video programming, reported a surge in Snapchat’s daily active users during the third quarter, adding 11 million to bring the total to a record 249 million. Snap’s performance suggests that rather than hinging on external circumstances, Quibi’s problems were more intrinsic:

Quibi relied on unknown content. The dependence on originals meant Quibi lacked prized, proven hits that can help video services launch with surefire audience enthusiasm. Those with long memories will recall that a major propellant for Netflix when it began streaming video was a 2008 arrangement to offer access to a large movie library and a live feed from the established premium service Starz. Without that, Netflix’s “Watch Instantly” service might have struggled to attain a sense of legitimacy.

Quibi started from scratch. A fundamental challenge for new participants is attracting subscriptions and screen time at scale in an environment where plentiful alternatives exist. Here again, Quibi was stranded. Except for a modest bundling arrangement with T-Mobile, it lacked the sort of built-in base available to entrants like Disney+ (via Verizon), Peacock (via Comcast’s Xfinity X1 and Flex), or Apple TV+ (a global device footprint) to achieve immediate market presence.

Quibi’s content thesis was unproven. Quibi founder Jeffrey Katzenberg seemed enchanted by the idea of pairing short-story content with premium production values, thus elevating the category of short-form video from its amateurish origins. But quality is in the eye of the beholder, and there is no convincing reason to believe people are entirely dissatisfied with less polished content found on YouTube, Tik Tok and other platforms. In fact, the inverse is probably true: YouTube has proven that a large audience exists for content that is unabashedly less than A-grade but has the benefit of being free.

Next? We don’t believe Quibi’s demise signals either a retreat from original video or a dismissal of short-form storytelling in the media business. Both are likely to live on and thrive under different business models. We do suspect Quibi has reminded the world, however, that it’s extremely difficult to achieve scale while lacking two key ingredients: built-in distribution avenues and proven content. Without one, or probably both, capturing interest and attention is extremely challenging. In that regard, the pandemic may have hastened Quibi’s demise, but it’s doubtful that it caused it.

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