The coronavirus pandemic has been a boon for streaming video, but that’s no guarantee of success for Jeffrey Katzenberg’s new app.
The former Disney chairman and DreamWorks co-founder on Monday launched Quibi, a buzzy short-form video service for smartphones, in the midst of a health crisis that has forced millions of Americans indoors with nothing but their phones to beat the boredom.
That may seem like the perfect environment for a new phone-centric video service, but some industry experts predict an uphill climb for the $1.8 billion startup.
Quibi, which boasts of content from stars like Jennifer Lopez, LeBron James, Liam Hemsworth, Nicole Richie and Sophie Turner, is launching amid “a cluttered battlefield” of streaming options, said Tal Chalozin, co-founder of Innovid, an advertising and analytics company that works with Roku, Hulu and Facebook.
That means fewer people may be willing to fork over money to pay for a new video service, assuming they even have funds to spare amid a surge in coronavirus-inspired layoffs, Chalozin said.
Aside from competing with streaming giants Netflix, Amazon and Disney+ — as well as social media sites like YouTube and Snapchat — Quibi will have to contend with NBCU’s streaming service Peacock, which launches on April 15, as well as AT&T’s HBO Max, which kicks off in May.
But unlike YouTube and Peacock, Quibi, which is short for “quick bites,” is charging for its videos, even when they come with ads. Subscribers pay $4.99 a month with ads or $7.99 a month without.
Quibi is offering a 90-day free trial, but Chalozin sees trial users discontinuing the service following the trial period amid a steadily climbing unemployment rate.
Also concerning, Chalozin said, is that Quibi’s shows — meant to be digested in seven-minute episodes — are designed for people on the go, like commuters waiting in line for lunch with a few minutes to spare.
“There are no commuters. In this climate, there are no water-cooler moments,” Chalozin said.
In an interview with The Post, Katzenberg acknowledged the challenges he faces, but argued that there’s still room for a service like Quibi.
“There’s no question that all of our rhythms and habits have been upended for every single one of us. But we still all have in-between times,” Katzenberg said of the pandemic. “Today, it’s homeschooling our kids, doing our chores or doing video calls for work. We still need breaks in our day.”
Katzenberg also blasted the notion that Quibi, which he founded with ex-HP CEO Meg Whitman, is competing against Netflix or HBO Max.
“We are not competing with TV, including the streaming services coming. They are all competing for the television set. That’s just not what Quibi does.”
Katzenberg said Quibi will start counting subscribers after the 90-day free trial, at which point the pandemic may have cleared. “Success is net paid subscribers,” the Hollywood mogul said. “We have always seen this as a marathon not a sprint.”