April 28, 2020

Quibi’s Rocky Start

Quibi recently reported driving 2.7 million app downloads in the two weeks since its April 6th launch. While 2.7 million downloads may sound like a big number, as a point of reference Disney+ surpassed 3.2 million app downloads on its first day.

More importantly, active users and paying subscribers are the metrics that matter for any streaming service supported by advertising and subscription tiers. If fact, touting downloads instead of engagement metrics tends to be highly misleading, since 21% of users abandon an app after one use and 71% of all app users churn within 90 days according to Localytics.

What’s really going on at Quibi?

Early User Ratings & Reviews Are Mixed
Quibi certainly may be above average in converting downloads to active users, but the mixed user reviews and ratings suggest that this may not be the case. While the average rating for Quibi on the App Store is a respectable 3.6 out of 5, it is well behind the 4.5 rating for Disney+, and the number of 1-star ratings is second only to the 5-star ratings (see charts below).

This trend becomes more obvious when looking at positive and negative reviews by day in the chart below from SensorTower.

Customers Were Immediately Frustrated
The inability to watch Quibi’s premium short-form programming on TVs immediately frustrated customers. According to Variety, within a few hours of launch, people were expressing their frustration with Quibi’s content availability being limited to their mobile device – something that was supposed to be a key differentiating feature for the service. To be fair, it certainly did not help that Quibi ended up launching during the COVID-19 pandemic, when stay-at-home orders have forced people to give up their mobile lifestyles.

Quibi has already acknowledged that the lack of support for TV viewing is an issue and has responded with a plan to allow users to “cast” content to connected TVs sometime next month. Unfortunately, casting from smartphones to a TV remains a niche activity and thus is unlikely to have much impact on adoption.

Unproven Business Model
While Quibi also deserves credit for trying something new and betting big on delivering premium short-form mobile content; whether people are willing to pay for it is still up for debate. Previous paid mobile-focused streaming services such as Vessel failed, and having to compete with free mobile apps such as YouTube, TikTok, Instagram, and Facebook is a major uphill battle.

Quibi Is Burning Thru Its Capital
Quibi has raised almost $2 billion, which is impressive, so you would think that the company has ample runway to pivot its business model and support more platforms beyond mobile. However, Quibi had very high initial expectations and is counting on strong early momentum. In fact, according to recent reports, they are expected to burn thru almost their entire war chest of $1.5 billion just this year. In addition, Quibi is already experiencing some internal turmoil, with its head of brand marketing exiting the company.

Conclusion
Quibi deserves credit for investing heavily on a mobile-focused platform and trying something new. Unfortunately, it chose to launch a mobile service during stay-at-home orders related to the COVID-19 pandemic. Once people resume more mobile lifestyles, Quibi’s value proposition will be more compelling. However, its assumption that people will pay for short-form mobile content has not been proven. Quibi still has time and money to pivot their business model and improve their content, but, for now, the company is off to a rocky start and facing a tough road ahead.

 
 

Brad is a Senior Advisor for TDG and is a highly accomplished digital marketer and advisor for leading entertainment and technology focused organizations. Prior to TDG, Brad served as the marketing lead for Motor Trend OnDemand, the premier OTT destination for gearheads and was the VP of marketing at Hallmark Labs for the launch of their family-friendly SVOD service. He currently lives in Los Angeles, CA.

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