Reed Hastings on Netflix's culture and its competitive set

Los Angeles (CNN Business)Quibi won’t be the last casualty of the streaming wars, as studios and other new players vie for consumers’ time. But its demise — officially announced Wednesday, only six months after its launch — will likely be recorded as one of the most predictable, reflecting a business plan founded on questionable demand that also came at the worst possible time.

Short-form video app Quibi is shutting down after just six months
Founded by Disney (DIS) and DreamWorks alumnus Jeffrey Katzenberg and former Hewlett Packard and eBay CEO Meg Whitman, Quibi billed itself as filling two distinct needs: An appetite for slickly produced content during the down time that people have while out and about, and the tendency to occupy those gaps by perusing phones.

    Hence, its much-lampooned “quick bites” formula, providing TV shows and documentaries sliced into 7-9-minute episodes, generated by marquee talent both in front of and behind the camera.
    As always with such ventures, Hollywood’s agents and content makers were happy to take money from a new buyer. But a pandemic that undermined the whole “on the go” notion intervened, even before the unproven strategy could be legitimately tested.
    Asked last March about that dilemma, Quibi largely dismissed such concerns. Less than two months later, Katzenberg sounded more glum, placing much of the blame on the unforeseen toll of coronavirus.

    Of course, that didn’t take into account a host of other problems, among them a creatively uneven opening salvo of shows, and lingering questions about whether people scrolling for news, sports scores and existing troves of short-form videos really yearned to dive into a juicy serialized drama or Chrissy Teigen-hosted court show.
    Quibi also had the distinct disadvantage of arriving months after competitors like the one from Katzenberg’s old studio, Disney, and Apple TV+, while vying for attention with HBO Max (from CNN parent WarnerMedia) and Comcast’s Peacock — two ventures that, notably, rely on the deep bench provided by library product as well as the appeal of new shows.
    Soon enough, Quibi was reduced to a punchline, which is never really the kind of publicity you want for this sort of fledgling venture. The fact that principals didn’t appear to be entirely on the same page in interviews only added to the sense the concept might be in trouble.
    Since questions of Quibi’s future arose, more jokes have flown in social media — an inevitable byproduct, perhaps, but no less distasteful given that plenty of people who joined the company with the best of intentions will lose those positions.
    In an open letter, Katzenberg and Whitman acknowledged that they might never know exactly why Quibi failed, “because the idea itself wasn’t strong enough to justify a standalone streaming service or because of our timing.”

      The media migration from the traditional ad-supported template to a direct-to-consumer subscription model continues to basically fly blind, leaving companies largely guessing about where the saturation point resides. Additional casualties seem destined to follow, and as Netflix CEO Reed Hastings told CNN Business in September, while well-defined brands such as HBO and Disney will likely survive, “We’ll see what happens with the others. There’ll be some consolidation.”
      For Quibi, the speed of its fall suggests a near-perfect storm of factors, some perhaps unique. Yet its fate also serves as a warning that with so many services jockeying for limited time and money — and not incidentally, the media attention necessary to help spur them — newer players can only reasonably expect so many bites at the apple, quick or otherwise.
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