Shut Down, Just Like That?: Quibi Shutting Down Spells “Life is Hard” in the Live Streaming VOD Industry
Quibi had a rather short stint, but it’s vanishing act will leave a stale taste in the mouth of everyone in the ad tech industry. Investors lost $1.8 billion that they invested hoping to build an adtech-centric company that would revolutionize the way viewers consume video content on their smartphones. They almost managed to sail through the months of challenge, until the ship sank in shallow waters within 7 months of their “Titanic” entry into the global VOD space. When we are witnessing a rise (flattering if we go by Netflix’s recent APAC subscribers acquisition report), Quibi’s shutdown will hit the mobile advertising and video market hard. The company’s incubation period was longer than its existence in the market, given that it took almost 18 months of hard work to its commercial launch in April 2020. While the co-founders and the CEO of the company acknowledged that Quibi was built to succeed but it didn’t because of two reasons:
- Weak Idea (that we can always find out as part of case studies)
- Timing of it all (Ahh! So pandemic took the blame)
Did Quibi Blow it Up all in Advertising Bubble — that burst Too Soon?
According to Mediaradar, in 2020, Quibi spent $63 million on advertising across TV, Digital and Print, making Quibi the 5th largest advertiser in the streaming category, year-to-date (YTD), coming in behind Amazon Prime Video, Disney+, Hulu and Peacock (in alphabetical order).
MediaRadar’s analysis revealed that Quibi made large advertising pushes in February (including a Super Bowl ad), March and April to promote its product launch, and spent heavily again throughout the summer (July, August and September).
MediaRadar’s deep dive discovered that Quibi was still advertising in October 2020, although its efforts were trailing off.
For example, MediaRadar saw an ad for Quibi as recently as October 18th, promoting its original “Wireless.”
Todd Krizelman, CEO and Co-Founder of MediaRadar, said, “Quibi was a bold business model looking to capitalize on the rise of streaming, and the fact that consumers are always on the go. The application was slick and the production value was high. Many feel the timing was off, launching at the start of a pandemic. But, this narrative doesn’t entirely fit. Due to COVID-induced lockdowns in April, commute times were eliminated, people had more disposable time than ever to sample new services, like Quibi. We also learned that people were willing to pay for video content. For example, Disney+ subscriptions surged much faster than expected. What was, and is a real constraint is the degree of competition. It’s more severe than ever. Disney+, Apple TV+, HBO Max and the introduction of Peacock around the same time made it hard to break through the noise. Services, such as TikTok, Snapchat and Triller – and of course YouTube pressed on the accelerator during these months, flooding the market with short-form video.”
Matt Conlin, President and Co-founder of Fluent, a leading performance marketing company, also shared his insights.
According to Matt, the Quibi saga is a telling tale for any new business that’s seeking a product-market fit. There are two major takeaways that anyone in the entertainment, streaming, and digital marketing industries can learn from Quibi’s rise and subsequent fall.
Agility is key – the pandemic hit and consumers were consuming more content than ever. They could have turned this into a growth opportunity by pivoting their messaging and product positioning.
Diversified media mix – Quibi spent a fortune on TV and traditional digital channels, while overlooking the power of performance partnerships and affiliate marketing. By focusing on performance-first channels where both parties’ incentives are aligned, they could have captured the unique and incremental customer base their product so desperately needed.
Know your customer – focus on consumers that were already consuming content via their mobile device vs. going mass market. With all the targeting tools made available via digital marketing today, there is no excuse for not creating a super targeted launch strategy and setting your organization up for success. For Quibi it was especially bad because they advertised on TV, yet consumers couldn’t consume their content on TV… leading to immediate consumer confusion.