“We don’t think we’ll take off like a rocketship. We think it’s something we build over the course of several years,” Katzenberg tells TheWrap
Are viewers willing to pay for yet another new streaming service — especially one that will only be available on their phones and feature short-form episodes?
Jeffrey Katzenberg and Meg Whitman, the two driving forces behind Quibi, think so. The Hollywood mogul and veteran businesswoman have spent the last 18 months priming their new, mobile-only streaming service for its closeup. On Wednesday, they gave the world a first look at Quibi during a keynote address at CES in Las Vegas, three months before the app is set to debut.
Katzenberg and Whitman are confident, in large part, thanks to the star-studded lineup they’ve assembled over the last year. A collection of top Hollywood stars and creators have signed on to make shows for Quibi, including Steven Spielberg, Kevin Hart, Jennifer Lopez and Kendall and Kris Jenner — among hundreds of others. The two executives are betting those names, tied to compelling shows and movies, will win over enough fans who are willing to pay for the service, which will offer a $4.99 per month ad-supported subscription, and a $7.99 per month ad-free version.
Quibi will launch on April 6, around the same time WarnerMedia and NBCUniversal will launch their own new streaming services. Netflix, with more than 158 million global subscribers, remains the industry leader, in addition to newcomer Disney+, as well as Hulu and Amazon Prime Video all competing in an increasingly saturated space.
Whitman, Quibi’s chief executive, believes the app will have more than just star power. In an interview with TheWrap, she championed the app’s “Turnstyle” technology, allowing viewers to effortlessly shift between both horizontal and vertical fullscreen video. This, Whitman said, will make Quibi a great viewing experience, even when subscribers are on-the-move.
TheWrap caught up with both Whitman and Katzenberg at the Park MGM to talk about Quibi’s content release strategy, the challenges it faces before going live, and its unique licensing agreement with creators.
Quibi has announced new shows almost each week for the last year. When the service launches on April 6, what’s the content release strategy look like? How many shows will be available right away?
Katzenberg: In the first year, we have 175 shows [that’ll be released], which is kind of amazing, including 35 movies. In the two-week free trial, which we’ll launch with on April 6, we’ll have 24 unscripted and documentary shows, and we’ll have 8 lighthouse movies, and we’ll have 25 “daily essentials,” which we’ll publish every day because most of them are 24-hour shows with news and information. We’ll publish 3 hours of original content every day, 52 weeks a year. And the idea is to have something for everyone in every moment. Those are the two things we set out to do. Which is, can we find those 2-3 things a day that delight and interest you, and can we find those 2-3 things a day that inform you. If we are successful, then it’ll be a great value to you.
“Turnstyle” is something Quibi is emphasizing, where viewers are able to shift between vertical and horizontal fullscreen video. Other prominent apps have typically leaned into either vertical or horizontal video, but not both. What went into the decision to have fullscreen video available in both directions?
Whitman: It was largely the use case. We think we’re 7:00 in the morning to 7:00 at night on-the-go viewing, where maybe you get on the bus and maybe you hold your phone in portrait, then you watch, sit on the bus for 10-15 minutes and watch in landscape and then go back. We knew we had to do seamless portrait to landscape in fullscreen video. There’s not much fullscreen video for your phone today. If you watch many services, if you watch in portrait, it’s a little postage stamp, ad if you hold it horizontally, there are big black lines [on the sides].
In addition to the free two-week trial, is there anything else you have in mind to “hook” viewers initially? How do you avoid losing steam once that period is over?
Whitman: The way we think of this launch is what I’d call “rolling thunder.” [Wednesday] is the first public reveal of everything Quibi. There have been stories on shows that we’ve signed and there have been other stories, but this is the full story of Quibi that gets launched. And then we’ll keep a constant drumbeat on news and milestone shows that we sign, and we’re going to invite the audience to sign up to be “Quibi insiders” so that we can keep people up-to-date on the shows that we’ve signed, new, and what’s happening with our social platform. [Editor’s note: “Quibi insiders” is essentially a newsletter.]
Then we’ll start our marketing program, which will be a combination of PR and communications, television [and] outdoor [ads,] and leaning heavily on our stars and social channels. You think about someone like Chrissy Teigen who has 30 million Instagram followers, Kendall Jenner has more than 100 million Instagram followers — it’s important for us to give them content. And because they own their own content at Quibi, they’re incentivized to build an audience for their own IP. We’ll build right up until launch in terms of awareness and familiarity and then ultimately we want people to download the app on April 6.
Katzenberg: We’re in a marathon, not a sprint. Disney+ is a 100-year brand with the most valued and important generational IP on earth, ever. We’re a different use case, and we don’t have the same brand recognition. So we don’t think we’ll take off like a rocketship. We think it’s something we build over the course of several years.
Can you break down the thought process behind the licensing model, in which you’re allowing creators to keep their content and take it elsewhere after a few years. Why did you take this approach?
Katzenberg: In order to get the best talent, the best IP, the best production companies, the best studios — we wanted to have Quibi be the place where everybody wanted to work. First, because creatively it’s a new opportunity; it’s a new challenge. The Hollywood creative community is fundamentally entrepreneurial. Every time they set out to do something that’s new — every movie, every television show. They are creators. So we gave them a new set of tools that Meg and the team have created that are really exciting about what you can do on this device and then gave them the resources to make it at a level that they’re used to working at. So top production resources and then gave them the upside, which, if you make something, and it’s a hit – you own it!
So why wouldn’t more companies take this approach?
Katzenberg: All I can say is that for Quibi, our business model is to give a huge upside reward for people who make content for us, and the reward for our investors is subscription and ad revenue. So we try and give everyone a “win” that has unlimited potential to it. And by the way, it’s the way the industry existed in the early ’60s, ’70s and ’80s before financial interests in syndication. This is the way broadcast network worked. They didn’t own any of their shows; they licensed them. People produced for them, and they own it.
Whitman: I like to say we own the platform profit pool, and we’re giving the creative profit pool to the creators — 100 percent of it.
Katzenberg: That model worked in broadcast television for almost four decades. So we thought, “Wow, why don’t we return to that. It worked out pretty well for everybody. We think it can work well for us today.”
I talked to Meg last summer about Quibi’s decision to keep its episodes to 10 minutes or less runtime, but Jeffrey, from your standpoint, why was this the way to go for Quibi?
Katzenberg: We’ve seen a huge amount of data on how people engage with video on their phone. And we know on a global basis, ex-China, the average time spent is 6.5 minutes [per session]. And if you look at the vast majority of our content, 93-95 percent, it is between 5-7 minutes. For our movies, we wanted to give filmmakers the amount of time to have a beginning, middle and end for each chapter. Having said that, almost none of it comes in at 10 minutes [long]. Scripted is in the 7-9 minute range, and the non-scripted is in the 5-6.5 minute range. And that’s what the filmmakers have done. We didn’t impose that on them, we’ve given them freedom [to decide].
Quibi launches in less than three months. What’s the biggest challenge you’re facing as you approach April 6?
Whitman: I actually feel like we’re in pretty good shape. We’ve been quite deliberate about this. Jeffrey and I had six months to write the business plan before we raised our first round of fundraising, and then we’ve had since August of 2018 to make this come to life. I feel like we’re pretty well organized, but there are a lot of things that have to come together: advertising, film, the app, all the tech, there’s a big amount of technology that runs this app, and I feel great about it. But it all has to come together and show up at the right time.
Katzenberg: If you think of it as a kind of race track, where all the horses are on the track and they’re running nose to nose, whether it’s the tech side, or the product side, or content side, everyone is running the race exactly as they should and as we anticipated. There isn’t anything, yet, where we see someone slowing down. But we still have three months to go.