It took all of six months for Quibi to fail in colossal fashion. Quibi (short for "QUIck BItes" but it may as well be short for "QUIck oBItuary") announced that it was shutting down the premium streaming video app on Wednesday night.
Quibi seemed to have it all, including seasoned leadership, celebrity-studded programming, and nearly $2 billion in venture capital. But it was evident early on that there wasn't going to be a Hollywood ending for Quibi. Let's go over some of the important lessons that investors can hopefully take away from all of this, helping them separate the darlings from the doomed in this now highly competitive streaming market.
1. You need TV on your side
It's hard to succeed if you don't have Roku (NASDAQ:ROKU) on your side. Just ask Peacock. It's even harder when you don't have any TV hub on your side. Quibi launched as a platform exclusively on mobile devices.
There's no shortage of mobile-first platforms that have rocked the mindshare mullet. YouTube and, more recently, TikTok are doing just fine as business-on-the-front and party-in-the-back platforms leaning largely on audiences armed with smartphones and tablets.
The difference here is that YouTube and TikTok are free ad-supported formats for most end users. Quibi did some bar-raising things with mobile tech, but it was never going to draw the paying audience it wanted without setting up camp on the largest screen in your house. The moment that Quibi decided to launch as a premium service, it was going to need to reach entire families in the living room. Offering serialized dramas and movies in short episodic installments was going to be a hard sell on mobile if it was literally a hard sell.
2. It's hard to recover from bad initial mistakes
Quibi launching solely on mobile was a death sentence. By the time it began to experiment with some TV access, it was too late. The marketing budget it blew on a Super Bowl ad well before the service was even launched and on some of its initial shows was forgotten by the time it quietly began to work its way into the living room. It still never got around to playing nice with Roku, though.
The 90-day free trial it launched with was another mistake. By the time Quibi realized that those folks weren't renewing when they actually had to pay for the service, it was already past what was eventually the midpoint of its life. It was too late to shift gears.
Apple (NASDAQ:AAPL) may face the same problem next month when it laps its Apple TV+ one-year anniversary. It launched its streaming video service by giving recent buyers of iOS gadgetry a free year of access. Will they stick around 12 months later when the meter starts running in November? Spoiler alert: Apple TV+ will be just fine, largely because it planned for its one-year anniversary even better than it did for its launch. This brings me to the final point...
3. Content, not celebrities, matter
Quibi had Jeffrey Katzenberg and Meg Whitman calling the shots in the C-suite. It had Chrissy Teigen, Sam Raimi, and Sophie Turner in its shows. The names were right, but the content ultimately didn't connect with its ideal audience.
Apple TV+ did the same thing. Oprah Winfrey, Jennifer Aniston, and Jason Momoa were among its shiny stars at launch. Folks generally didn't care for the shows. You don't need a star for a show to be a hit. The Mandalorian lacks big-name stars. Stranger Things relied on a young cast of largely unknown actors. The shows have to be good.
Apple gets it now. Ted Lasso this summer is the well-reviewed sleeper hit that will be a solid building block. The exclusive deal for classic Peanuts seasonal shows will keep subscribers close for holidays to come.
Quibi learned too late. By the time it was truly taking things to the next level with its turnstile technology (where shows are shot in landscape and portrait mode, adjusting to the orientation of how the mobile device was held), it was too late. When the Steven Soderbergh-produced Wireless came out last month, and the dual viewing modes were tweaked to show two entirely different perspectives of the same story, the audience had moved on.
Quibi doesn't see it that way. It believes that its failure was likely the result of the idea itself or its timing. It's not going to see the fault in its content or the flaws in its rollout and execution strategies. It's just as well. It was up against mighty media stocks anyway. It probably never stood a chance, but a lot of Quibi's shortcomings were its own doing. It won't be the last platform to fail, but others will succeed. Quibi got it wrong so that others will learn how to get it right.