After just 7 months, the short-form streamer's missteps are finally catching up.
The Wrap is reporting that Quibi might shutter after only seven months in operation. They are gathering the executives to break the news and will return what's left of the initial investor money. Quibi was a big swing that felt like it suffered not only from the pandemic but from not understanding people want entertainment they can watch anywhere.
As the article goes on to say, "A knowledgeable individual told The Wrap that Katzenberg has been trying to sell the content to other distributors in recent weeks, without success, largely because of the short-form serial format. “The content has to be re-edited to be legitimate,” said this individual. "It’s designed to have 10-minute breaks for commercials."
Time will tell if places like YouTube or other streamers take a chance on the shows.
So why is it shutting down?
Well, Quibi was only on track to get around 2 million customers, when they had hoped for over 7 million. These signs were available at the start. Here's a staggering fact: Out of 910,000 people who downloaded Quibi in the three days following its April 6th launch, only 72,000 users converted to paying subscriptions, Sensor Tower reported in July.
Quibi worked overtime to fix problems that they just never saw, like the inability to share screenshots or clips on Social Media and not being able to watch on TVs at home. They also lacked a huge breakout show, and there was never a conversation about something you cannot miss. It was always about the business and how it was bleeding the $2 billion dollars it raised to start.
The announcement of the shutdown is pending, but the Wall Street Journal reported that Quibi has hired a restructuring firm to evaluate its options, with shutting the company down being one of them. It seems like that's the one favored by all involved.
We will see what happens.
I ran some numbers a few weeks ago, and the result was that the market can support only up to 6 paying subscriptions (eg. Disney+, Netflix, HBOMax, Paramount+, AppleTV+, Hulu), 5-6 major free ad-based ones (eg. TubiTV, Peacock, Crackle, RokuTV etc), and about 7-8 smaller free ad-based services (e.g. Vudu, Pluto, IMDbTV, Canopy etc). Quibi didn't fit at all into that model.
I believe that we're heading towards major consolidation in the next 4 years. For example, Hulu might not survive as Disney+ adds adult Fox shows as rumored (Disney is the major stakeholder in Hulu and owns 20th Century Fox), while things like Showtime, Epix, Shudder and StarZ will have to merge with their parent companies' streaming services (or sell out) to provide more content richness in order to survive.
As for Netflix, it bleeds money left and right by going for quantity over quality. At least 50% of the shows it provides (over 1300 originals so far), are not watched by viewers. Too much clutter. It makes sense to create a secondary Netflix app (or part of the main app), called Netflix Free or something, and provide that bottom 50% of shows free with ads. At least this way they could recoup some of their costs.
For me, these things are evident and to be expected. The only big unknown is Sony Pictures. They are the only big studio that doesn't own a streaming service. They even sold Crackle, that they owned for years, because their CEO didn't want to follow a streaming strategy back in 2018. But now with the theaters are faltering, let's see how they will survive.
October 21, 2020 at 3:31PM