Jeffrey Katzenberg was sitting in a small glass office in Hollywood with very little in it besides a mini fridge (full of caffeinated beverages), a head of product, a publicist, and an iPhone. It was late 2019. Katzenberg, 69, was talking about Quibi, his long in-development, mobile short-form video platform that managed to raise $1.75 billion before it even launched.
With nearly 50 years of experience in the entertainment business, Katzenberg is probably the only tech founder who can casually lay claim to having produced 406 live-action films, 41 animated movies, 75 television shows, and half a dozen Broadway plays--which he noted as he laid out his vision for his new company.
Quibi finally launches April 6, and it's been a wild ride already. The startup has been the recipient of months of breathless hype and pre-release criticism, as well as a lawsuit from a company claiming Quibi's central technology infringes on its own. What's more, Quibi's long-planned launch date now falls right in the middle of a worldwide panic over the new coronavirus.
"I've been a startup guy my whole life," said Katzenberg, who on that day was very much dressed the part in black jeans, a black shirt, and spotless white shell-toe sneakers. Back when he was Disney's No. 2 and then co-founder (with Steven Spielberg and David Geffen) of DreamWorks SKG, Katzenberg was known to reply to emails by fax. But now he'd begun sounding like a Silicon Valley founder, his patter filled with talk of "scale," "product," and "learnings." Without irony, he even suggested that one of Quibi's goals was to change the world. "We don't save people's lives," he said. "But if we succeed, we make people's lives better."
Rebranding your idle time
Quibi--a portmanteau of "Quick Bites"--is a mobile-only platform for short daily videos, backed by some of the biggest names in Hollywood, including Disney, NBCUniversal, WarnerMedia, Viacom, and Sony. China's Alibaba Group is an investor as well. Before even signing up a single subscriber, the company managed to attract stars like Chrissy Teigen and Steven Spielberg, along with Lena Waithe, Kevin Hart, Reese Witherspoon, Bill Murray, Idris Elba, Naomi Watts, The Rock, and seemingly anyone with an IMDB page, to create five- to 10-minute programs. Subscriptions will go for $4.99 per month ($7.99 without commercials).
Quibi also locked in partnerships with Google and T-Mobile (the latter ensuring free bundling with phone plans) and buy-in from advertisers like Procter & Gamble, PepsiCo, and Walmart. The company sold out its entire $150 million ad inventory for 2020 without so much as a preview of its content. In a 2020 Brand Spotlight paper, Forrester Research said Quibi "could dramatically alter how we consume media"--and that was before the app even debuted for pre-order in the iOS App Store.
Despite all this pre-release buildup, Quibi is still a big gamble. Players like Netflix have shown that combining Silicon Valley technology with Hollywood talent can be lucrative, but the Los Gatos, California-based streaming company and its competitors have digitized and monetized half a century of human behavior: watching television.
Quibi is attempting to create a new consumption model: watching short programs while waiting for a bus or for a bagel to toast. That's time that people now spend scrolling through their social-media feeds, playing casual games, or, you know, staring into the distance and thinking. For Quibi to truly take off, users will need to reframe that time as heretofore undiscovered entertainment opportunities.
To help teach potential subscribers how to rethink those tiny pockets of time, Quibi rolled out a series of commercials--and laid out some chunks of its war chest to air them during the Super Bowl and the Oscars. But just because the company wants to rebrand idle time as Quibi time doesn't necessarily mean it will stick.
Katzenberg, that is, may have created a solution for a problem that doesn't exist. Every entrepreneur has to figure out the supply and demand side of a product. Quibi has created the best supply that money can buy. But demand may be harder to conjure.
Known throughout his career for his doggedness and ability to see around corners, Katzenberg is essentially attempting to create an entirely new form of entertainment. And investors are surely betting on him as much as on the idea itself. If it works, Quibi could live up to its early codename: NewTV. If it doesn't work, it could be the next Magic Leap, a much hyped, much-funded AR/VR startup that was supposed to change everything but is now most often referred to when people muse, "Whatever happened to Magic Leap?"
Hollywood meets startup-land
Rather than build his short-video empire on the shoals of L.A.'s Silicon Beach, where Snap, Google, Facebook, Buzzfeed, Vice, and other 21st century creators plot their siege on our time and attention, Katzenberg and his co-founder, CEO Meg Whitman, 63, settled on a 49,000-square-foot office in Hollywood. Quibi's digs are spread out over two stories in a building literally in the shadow of Sunset Las Palmas Studios, where Howard Hughes produced Hell's Angels in 1930 and Lucille Ball and Desi Arnaz first shot I Love Lucy in 1951. It's also a short walk to the Hollywood Forever Cemetery, where more than a few groundbreaking talents like Cecil B. DeMille and John Huston are buried.
While Quibi may have one foot firmly planted in old Hollywood, its staff of 225 is made up overwhelmingly of the sort of bright young things iterating the future at startups in Silicon Valley. Katzenberg made sure to note his team's diversity numbers (high) and ages (low), while taking pains to emphasize that more than 50 percent are women.
"We need to be the audience," Katzenberg explained. To capture a young, ethnically diverse audience, Quibi is presenting itself as a young, ethnically diverse company. (Pay no attention to the Boomers in the C-suite.)
During a visit to the Quibi office, a visitor might see a Broad City co-creator deciding to forego samples from a colossal wall of free candy in the waiting area, or basic cable veterans dressed down in jeans and sneakers holding standup meetings with painfully hip younger colleagues around a concrete ping-pong table in the courtyard.
While Quibi's office features all the accoutrements of a forward-looking startup, many industry observers are wondering if the company will change the way we consume content or go the way of so many other video startups. Mobile video platforms like Verizon's GO90, Comcast's Watchable, and Samsung's Milk Video have sunk to the bottom of the app store like bodies buried at sea; once-popular destinations for online video like College Humor, Funny or Die, Super Deluxe, Facebook Watch, and Instagram TV have either shuttered or scaled back as media companies' once-heralded "pivot to video" went into turnaround.
Meanwhile, platforms like Snap, TikTok, and YouTube thrive, largely because their content is generated by users, usually for nearly no cost, in their bedrooms or on the bus to school, rather than by Hollywood talent with packs of assistants and shelves of awards. Add to that, streaming giants like Netflix, Amazon, Disney+, Apple TV+, and Hulu continue to battle for our attention (and monthly subscription dollars) at home and on our phones.
For decades, Katzenberg has been admired (and feared) for his work ethic. He claims that he needs to sleep only five hours a night ("a genetic gift"), which grants him an extra day per week to get things done.
As a young exec at Paramount, Katzenberg spent all day Saturday reading scripts on the lot, a labor-intensive undertaking for a lifelong dyslexic. As he rose in his field, he was infamous for telling underlings, "If you don't come to work on Saturday, don't bother coming in on Sunday"--a quote he now says he meant at the time but which he doesn't espouse anymore. "You learn that people are at their best when they have balance in their life," he says. That doesn't stop him, though, from spending his weekends reading scripts for up to 12 hours and watching shows-in-progress for six to eight hours.
Despite his superhuman diligence, Katzenberg needed someone to actually run Quibi. For that, he recruited Whitman, who previously served as CEO of eBay and Hewlett-Packard, and who in 2010 ran unsuccessfully for governor of California as a Republican.
Katzenberg and Whitman have been friends for 35 years, and when Whitman announced her departure from H-P in 2017, Katzenberg called her immediately and asked, "What are you doing tonight?"
"I'm just kind of hanging around," said Whitman, who was living in the Bay Area.
"Well, I'm coming up for dinner."
That night, Katzenberg, who was already laying the groundwork for Quibi (and, naturally, doing press with a cover story in Variety that featured the boffo quote, "Is it bigger than DreamWorks? I hope so.") told his old pal about his idea. It was the perfect Hollywood pitch: Netflix meets Snapchat, a marriage of super premium and super short.
Premium short-form content is something that Katzenberg has been thinking about since at least 1999, when DreamWorks partnered with Imagine Entertainment to launch pop.com, a well-publicized site dedicated to live action and animated shorts that shut down within a year. This was before broadband, before smartphones, and before YouTube. The world wasn't ready for it.
Eventually, Katzenberg and Whitman locked in $1 billion (and counting) in funding and built a team that includes former Snap and Pandora executive Tom Conrad as head of product and former Viacom Music and Entertainment Group head Doug Herzog as a content adviser. Three other high-profile executive hires--former DC Entertainment president Diane Nelson, Hulu's Tim Connolly, and former chief creative officer of The Hollywood Reporter-Billboard Media Group Janice Min--have left the company before launch.
Industry insiders have speculated that the departures signal trouble at the company, but Whitman dismisses the idea. "Given how many people we hired, it's been a relatively very small turnover rate," she said when I reached her by phone.
Deploying the blockbuster model on tiny screens
Looking at many of the shows Quibi has announced, it's easy to imagine a team of digitally native 20-somethings making picks based on what's likely to meme in a big way. That may explain the overwhelming presence of celebrities embraced by the extremely online, like Teigen (the internet's best friend), Elba (the internet's boyfriend), Murray (the internet's weird uncle), and Waithe (the internet's aspirational model).
Quibi has also tapped social-media-minted personalities like Millennial motivational speaker Rachel Hollis and "Kirby Jenner," whose satirical Instagram account claims to document the life of Kendall Jenner's little-known fraternal twin. (His show, also called Kirby Jenner, is being produced by his "sister" Kendall and her powerhouse mom/manager, Kris.)
Other announced shows feel like the result of an epic white-boarding session aimed at hooking the next generation of viewers via the properties beloved by the previous. Reboots of MTV's Punk'd and Singled Out, Comedy Central's Reno 911!, an adaptation of Varsity Blues and a docs-series called Barkitecture (which Katzenberg described as "Cribs...but for dogs") all have a comfortably nostalgic feel.
Nostalgia permeates Quibi's framing of itself--a strange thing given its ambitions and Katzenberg's own career-long reputation as a futurist. (In 1990, he penned a 28-page memo to his Disney colleagues called "The World Is Changing: Some Thoughts on Our Business" that sought to galvanize them to break out of old patterns and "summon the energy to go out and find the new people who have just as much talent and will be the stars of the future.")
Analysts are watching and waiting to see what happens. Richard Broughton of Ampere Analysis suggests that Quibi's biggest challenge may be "proving the value of short form video. Will [users] actually pay for it with the huge volume of content for free?"
At the Consumer Electronics Show in Las Vegas in January, Katzenberg offered a keynote that suggested his new platform was inevitable, almost the result of natural selection. A computer-animated video that opened his speech drew a direct line that began with the birth of cinema and ran through the creation of television, VCRs, personal computers, DVD players, and smartphones, and culminated (naturally) with Quibi.
Audience reception was muted, but the aspect of Quibi's launch that created the most murmuring throughout the Park Theater at the MGM Park was Turnstyle, a patented technology that shifts a video's framing when the user rotates her phone from portrait to landscape mode. Rather than simply resizing or letter-boxing the video depending on the phone's position, Turnstyle uses the phone's gyroscope to seamlessly toggle between two distinct frames, allowing viewers to see programs in two different ways. Turnstyle is also the piece of tech that Quibi is being sued over. The company counter-sued in an effort to get the claim dismissed.
Turnstyle, as demonstrated at CES, enables new storytelling forms. Wireless, a Steven Soderbergh-produced Quibi series that the company previewed to reporters, switches between showing the action in landscape mode and showing the character's phone screen in portrait mode. But one piece of cool technology and a raft of very expensive shows may not be enough to break through in a world of constant TikTok memes.
Katzenberg, for one, didn't seem worried before launch. His bet is that if Hollywood builds it--if he builds it--people will come. That's how the blockbuster business works. Whether that thinking translates to consumer behavior remains to be seen--and will be as fascinating to watch as any of the shows on the platform. "I cannot claim that I'm fearless," he said. "I'm without fear. I don't know any better! It just doesn't occur to me!"