EXCLUSIVE: Quibi CEO Meg Whitman concedes that the early run of the mobile-first streaming service has come in “slightly below expectations,” due in large part to the paralyzing effects of COVID-19.
In an interview with Deadline, though, Whitman described the streaming service’s initial performance as “solid,” adding that North America’s gradual emergence from lockdown gives her reason for optimism.
“We were designed for a different use case, no question about it,” Whitman said Monday evening, acknowledging that the notion of an on-the-go, short-form video experience is far less viable when most of us never go anywhere. “But we’re pretty pleased about where we are.” Plus, she added, “As the country begins to open, that will be helpful to the use case.”
Whitman’s upbeat comments came a few hours after Jeffrey Katzenberg, managing partner of Quibi parent WndrCo, told the New York Times that he blames “everything that has gone wrong” with Quibi on COVID-19. While third-party estimates have been a bit lower, Quibi pegs its numbers at 3.5 million downloads and 1.3 million active users since April 6 (with 1.7 million of the downloads coming in Week 1.) “Is it the avalanche of people that we wanted and were going for out of launch? The answer is no,” Katzenberg was quoted as saying. “It’s not up to what we wanted. It’s not close to what we wanted.”
Apart from skeptics’ questions about Quibi’s viability in the high-stakes streaming competition strictly on merit, there has been an additional threat in the form of a legal battle with Eko. The tech company has sued Quibi, alleging that the startup stole its technology and used it as the basis of the “Turnstyle” interface it touted at a high-profile pre-launch event at CES last January.
The result of the subscriber shortfall has been an internal effort to revise projections for the first full year, which was expected to yield 7 million subscribers and $250 million in subscriber revenue. Even if those targets seem less certain now, Whitman said the company has “ample resources” from its total funding to date of $1.8 billion. It also sold out advertising on the platform with buyers signing one-year contracts, which will tide Quibi over to spring 2021. (Most initial subscribers, not surprisingly, have favored the $5-a-month, ad-supported version over the $8 ad-free one.)
Whitman said Quibi will make a renewed pitch to advertisers this fall in order to re-engage Madison Avenue, though the environment is uncertain for all sellers given the sudden economic downturn. While some Wall Street analysts and advertising observers expect digital businesses to rebound more quickly than traditional TV, marketing budgets across the board are being pulled back for the near future.
While the tone of Katzenberg’s quotes to the Times ranged from mopey to tetchy, a contrast to some previous post-launch updates he had provided, Whitman affected a can-do optimism. She has been to plenty of rodeos before, having steered big tech companies like Hewlett-Packard and eBay, scaling the latter from 30 employees and $4 million in revenue to an $8 billion company with 15,000 workers.
Quibi’s plans to implement versions suited to a TV set were always part of the plan for the startup, she said, but those plans were “accelerated” by COVID-19. As overall streaming started to skyrocket, for example giving Netflix a year’s worth of subscriber gains in the first quarter alone, Quibi had only its mobile app. That gave it an initial hurdle compared with entrenched offerings as well as newer arrivals like Disney+ and Apple TV+. (NBCUniversal’s Peacock and WarnerMedia’s HBO Max are nearing their national debuts.) Whitman said Apple iPhone users can “cast” images from their phones to a TV and a lean-back app will be available via Apple devices by the end of May, possibly sooner.
Answering another looming question about the content offering, Whitman said the service’s 45 shows at launch, with two added every week since, is still the planned tempo through at least Thanksgiving. While the Times article indicated the pace would slow, “We’re not throttling back,” Whitman said. Unlike many other streaming efforts, she noted, Quibi had no pre-existing library and “had to start from scratch.”
While she acknowledged that no Quibi show has broken into the zeitgeist despite a roster of A-list creators and stars ranging from Liam Hemsworth to Anna Kendrick to Chrissy Tiegen, she said “our content is resonating. … We’re pretty pleased with where we are.” Among active users, there is a group the company calls “gold” users, especially avid daily viewers, who have favored shows like Dummy and Stranger and Most Dangerous Game.
“I’m feeling very confident in what we’re doing,” Whitman said. While the timing of the launch in retrospect seems almost Biblically jinxed, she said she is trying to stress the upside. “We now have a chance to hone in on what we’re doing.” Based on frequent feedback from initial users, she said, “We’re learning something new every day.”
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