Quibi: The Mysterious Billion Dollar Streamer
Have you ever tried watching a video and got interrupted by work? Or what about starting a video and a friend calls after a few minutes wanting to grab a drink? We all know the feeling of watching videos and having to pause and start and pause again while life gets in the way. One startup thinks it has the solution to this.
Quibi, short for "quick bites," wants to revolutionize the way people watch videos by breaking them down into a series of short videos, typically about 10 minutes long. The company is geared towards a younger audience and will create the content to be viewed exclusively on mobile phones.
Katz out of the Bag
The startup is the brainchild of Jeffrey Katzenberg, who was formerly chairman of Walt Disney Studios before becoming co-founder and CEO of DreamWorks Animation. If anyone can tackle a new video format, it's Katzenberg. Films that have been produced under his leadership include The Little Mermaid, Beauty and the Beast, Aladdin, The Lion King and Shrek.
Katzenberg selected Meg Whitman, who he met at Disney in 1989, to be Quibi's CEO. Whitman is notorious for being eBay's CEO and overseeing the company's growth from $4 million in annual revenue to more than $8 billion in 10 years. Following her stint as CEO of eBay, she ran for governor of California before becoming CEO of Hewlett-Packard.
"We need more streaming services" - No one, 2019.
Why go for mobile? According to eMarketer, the amount of time people spend watching videos on their phones has increased from six minutes per day to close to 70 minutes per day since 2012.
Katzenberg insists he's not going after the big networks, saying "I’m going to continue to believe, and argue, and preach that Quibi is not a substitute or a competitor for television." He pointed out that 10% of Netflix, Amazon and Hulu subscribers watch videos on their mobile phones. That's where he sees an opportunity for Quibi to be geared towards mobile phone viewing.
The Streamer for Millennials
Quibi is expected to launch on April 6, 2020 with two pricing tiers. The cheaper tier, which includes ads, will cost $4.99 per month while the ad-free tier will cost $7.99 per month. Whitman said they expect to have 7,000 pieces of content available within the first year.
From a price perspective, Quibi's ad-free tier is cheaper than all of the other streaming services. The ad-free tier is a little more expensive than Disney+ and Hulu, but less expensive than Netflix. However, given Quibi's mantra of viewing videos on the go, it's unlikely most will give up another streaming service to add Quibi. Sony was proof that not all entrants into video streaming are successful, though, as they pulled their Vue service last month after admitting the sector is too competitive.
Investors, Talent, Inventory
Quibi has attracted just about everyone in Hollywood as investors. The company has raised $1 billion with all major Hollywood studios, such as Disney, 21st Century Fox, NBCUniversal and Sony, taking part. It's not just a who's who of investors, but employees also, as Quibi has attracted former employees of Google, CBS, Spotify, Hulu, Facebook and Netflix.
Advertisers are already rushing to Quibi before it even launches. Quibi has already sold out its $150 million first year advertising inventory. PepsiCo, Walmart, Google, T-Mobile and Taco Bell are just some of the brands that have already booked ads. The movie studios that have invested in Quibi are also expected to run ads.
With Disney+ hitting 10 million subscribers on its first day, it will come as no surprise if Katzenberg, who oversaw many of Disney’s most successful films, turns Quibi into the next hot streaming service.
Funnest Funding Rounds of the Week
They waited 14 years for this. 1Password, which was founded in 2006, closed a $200 million Series A funding round after not taking a cent from VCs previously. 1Password, which enables you to store all of your passwords and log in to sites with one click, has been profitable since day one. The funding came entirely from Accel and is now the firm's largest investment in its 35-year history. 1Password's CEO Jeff Shiner said "We need to grow, and grow aggressively, which is not just hiring people, but also getting the right partners, finding the right leaders to help us with that growth."
They want a slice of a very large pie. Convoy, which has built a digital freight network to connect shippers and carriers, has just raised $400 million in a Series D funding round to scale its business. The company, which is going after the $800 billion spent annually on trucking services, now sports a $2.75 billion post-money valuation. Despite facing stiff competition, Convoy is now moving tens of thousands of loads across the U.S. per week. Convoy has a roster of well-known backers, including Amazon CEO Jeff Bezos, Salesforce CEO Marc Benioff and even U2 singer Bono.