What Happened to Quibi?
Reasons behind the exceptionally quick departure of the bite-size streaming platform
In theory, Quibi had an appealing offering. In a world where phone screen time has overtaken TV¹ and user attention span is continuously shrinking², a mobile-only, short content platform for a young demographic was an intriguing and logical offering. No wonder it raised a whooping $1.75 billion in funding. The airtime of the company, however, was cut short merely six months after the launch. This article explores the contributing reasons behind the abrupt shutdown and what lessons can be learnt from it.
Poor Timing
The vision behind Quibi was rapid consumption for those on the go. Commuting? Watch Quibi. Lunch break at work? Quibi. Standing in a line at a grocery store? Quibi!
Except the status quo changed when the world gradually went into a global COVID-19 lockdown a few weeks before Quibi’s launch. A big increase in streaming service usage followed³ which was the catalyst for Quibi’s decision to launch the platform sooner rather than later. However, entertainment consumption patterns had also significantly changed. Since access to the physical world outside of one’s home was restricted, binge-watching 5 hours of Tiger King in front of a TV became the new normal⁴. This significantly limited the user touchpoints that Quibi was after and made the short-form content less desirable. So, although the pandemic benefited streaming services in general, Quibi was a product for a market that was no longer there.
Content and Platform Issues
Timing is only part of the problem. While it is true that consumer behaviour patterns have changed during the pandemic, general smartphone usage went up. In reality, Quibi’s content offerings failed to resonate with its audience. The platform delivered mostly mediocre shows that did not generate any widespread mainstream following⁵ (despite being nominated for and winning multiple Emmy Awards in the short-form categories).
Not only did Quibi miss the mark with its content, but it also failed to iterate and adapt its platform in time. It lacked standard features like continuous episode playback or the ability to play videos on TV and other larger screens. Although many of the features were later introduced, the damage had already been done and many have dismissed Quibi. This led to 90% of subscribers leaving the platform after their free trial ended⁵. Scalability and growth were also infringed by the lack of content sharing features from the onset. Such product deficiencies made Quibi an inferior choice in the eyes of the consumers.
Saturated Market
There are a lot of streaming services to choose from in 2020. When it comes to short-form entertainment you also have the free TikTok or YouTube apps. Given this, Quibi’s price points of $5 and $8 (with ads and ad-free) failed to stand out, especially considering the already discussed product limitations. A cheaper offering might have fitted in better with the brand of quick consumption and appealed to the younger demographic that Quibi was after.
It also did not produce a hit show that would have generated media buzz and attracted new audiences as the Witcher did for Netflix⁷ or the Mandalorian for Disney+⁸. Without it, Quibi did not maintain its momentum and the general interest flattened out rapidly after the launch.
Lessons
- Timing matters — poor timing can turn a great idea into a terrible one. Entrepreneurs need to be aware of the overall market state to ensure that they are not launching their startup too soon or too late so that the consumers can fully embrace the new offering.
- Product-market fit is everything — Quibi example proves that in the venture world there is no such thing as too big to fail. Early and constant customer feedback with frequent product iterations are the keys to building a product that customers will love.
- Find your niche — when the competition is fierce you should only aim to enter the market with a much better solution or one that is significantly different. Otherwise, the incumbents will hold natural advantages that will make competing very difficult.
