1 00:00:04,440 --> 00:00:12,640 Speaker 1: Welcome to Tech Stuff, a production from iHeartRadio. Hey there, 2 00:00:12,640 --> 00:00:16,280 Speaker 1: and welcome to tech Stuff. I'm your host, Jonathan Strickland. 3 00:00:16,320 --> 00:00:19,480 Speaker 1: I'm an executive producer with iHeartRadio and I love all 4 00:00:19,600 --> 00:00:23,720 Speaker 1: Things tech and. On April sixth, twenty twenty, a video 5 00:00:23,800 --> 00:00:28,040 Speaker 1: streaming service called Quibbi launched in the United States. Unlike 6 00:00:28,080 --> 00:00:33,720 Speaker 1: streaming services like Netflix or Hulu, Quibi's content is short form, 7 00:00:34,000 --> 00:00:39,360 Speaker 1: though extremely highly produced. They are episodes or movie chapters 8 00:00:39,640 --> 00:00:43,239 Speaker 1: that time out at around ten minutes or less. The 9 00:00:43,280 --> 00:00:47,239 Speaker 1: whole idea was to go after a relatively untapped market, 10 00:00:47,600 --> 00:00:49,840 Speaker 1: people who have a little bit of time to kill, 11 00:00:50,080 --> 00:00:52,199 Speaker 1: but who don't have the ability to sit down for 12 00:00:52,240 --> 00:00:56,720 Speaker 1: a full half hour or longer and watch a movie 13 00:00:56,840 --> 00:00:59,680 Speaker 1: or TV show. Quibi would go after folks who might 14 00:00:59,680 --> 00:01:03,080 Speaker 1: be standing in line or otherwise doing next to nothing. 15 00:01:03,280 --> 00:01:06,280 Speaker 1: It would really be the smartphone crowd. Quibi would help 16 00:01:06,280 --> 00:01:08,480 Speaker 1: people fill in those short gaps of the day that 17 00:01:08,800 --> 00:01:13,240 Speaker 1: aren't really dedicated to something else. When Jeffrey Katzenberg first 18 00:01:13,240 --> 00:01:16,880 Speaker 1: started working on the concept a couple of years before launch, 19 00:01:17,200 --> 00:01:20,200 Speaker 1: it seemed like it could be a really big thing, 20 00:01:20,480 --> 00:01:25,960 Speaker 1: a potential hit. But Quibi didn't count on COVID nineteen. 21 00:01:26,520 --> 00:01:29,319 Speaker 1: I mean, to be fair, none of us did, and 22 00:01:29,360 --> 00:01:32,360 Speaker 1: in fact, even when it was becoming more apparent, a 23 00:01:32,400 --> 00:01:36,920 Speaker 1: lot of us were not giving it enough attention, and 24 00:01:37,040 --> 00:01:41,360 Speaker 1: COVID nineteen would change the landscape dramatically, taking the legs 25 00:01:41,400 --> 00:01:44,640 Speaker 1: out from under Quibi before it could even launch. So 26 00:01:44,720 --> 00:01:47,880 Speaker 1: today I'm going to talk about Quibi, how it went 27 00:01:47,960 --> 00:01:51,600 Speaker 1: from idea to service, and how the era of COVID 28 00:01:51,680 --> 00:01:54,840 Speaker 1: nineteen has really messed the business plan up for the company. 29 00:01:55,080 --> 00:01:58,800 Speaker 1: But let's get into the history of Quibi. Our story 30 00:01:58,960 --> 00:02:03,600 Speaker 1: starts with a famous media businessman, Jeffrey Katzenberg. He was 31 00:02:03,640 --> 00:02:06,840 Speaker 1: born in New York City in nineteen fifty. He attended 32 00:02:06,880 --> 00:02:09,560 Speaker 1: New York University for a year and then held a 33 00:02:09,600 --> 00:02:12,320 Speaker 1: series of odd jobs before being hired on in the 34 00:02:12,360 --> 00:02:16,920 Speaker 1: mail room of Paramount Pictures. The CEO of Paramount was 35 00:02:17,840 --> 00:02:23,320 Speaker 1: another famous movie businessman at that time, Michael Eisner. Katzenberg 36 00:02:23,440 --> 00:02:26,120 Speaker 1: worked up through the mail room all the way to 37 00:02:26,200 --> 00:02:30,320 Speaker 1: the position of president of the Motion Pictures and Television 38 00:02:30,400 --> 00:02:35,400 Speaker 1: Production Division. When it comes to American dream stories, this 39 00:02:35,440 --> 00:02:39,120 Speaker 1: one really seems to fit the bill. In nineteen eighty four, 40 00:02:39,520 --> 00:02:43,880 Speaker 1: Eisner shifted over to Disney and Katzenberg joined on as 41 00:02:43,919 --> 00:02:47,680 Speaker 1: a junior partner. At the time, while the company had 42 00:02:47,760 --> 00:02:51,400 Speaker 1: an enormous vault of beloved movies and animation, and the 43 00:02:51,400 --> 00:02:55,520 Speaker 1: theme parks were still you know, real vacation destinations, the 44 00:02:55,600 --> 00:03:00,240 Speaker 1: company itself was kind of in the doldrums. Creatively speeding, 45 00:03:00,680 --> 00:03:04,560 Speaker 1: Eisner and his team helped transform that. Katzenberg oversaw the 46 00:03:04,600 --> 00:03:09,440 Speaker 1: animation division as well as Touchstone Pictures, the movie studio 47 00:03:09,480 --> 00:03:12,840 Speaker 1: that made stuff for you know, adult audiences, and he 48 00:03:12,919 --> 00:03:16,600 Speaker 1: gained a reputation for being quick to cut anything he 49 00:03:16,720 --> 00:03:20,520 Speaker 1: saw as dead weight, downsizing the division in the process 50 00:03:20,560 --> 00:03:25,600 Speaker 1: in order to cut costs. But his ruthless aggression worked. 51 00:03:26,000 --> 00:03:28,639 Speaker 1: The division had been bringing in about three hundred and 52 00:03:28,639 --> 00:03:32,000 Speaker 1: twenty million dollars in revenue before he was brought on, 53 00:03:32,560 --> 00:03:34,440 Speaker 1: but by the end of his run it was close 54 00:03:34,520 --> 00:03:39,720 Speaker 1: to four billion dollars. Katzenberg was good at his job. 55 00:03:40,160 --> 00:03:44,040 Speaker 1: Along the way, Disney had its renaissance in animated films 56 00:03:44,080 --> 00:03:47,240 Speaker 1: with releases like The Little Mermaid and Beauty and the Beast, 57 00:03:47,840 --> 00:03:50,400 Speaker 1: and this seemed to be a return to the company's 58 00:03:50,520 --> 00:03:55,120 Speaker 1: former animation glory. Honestly, a lot of the work Katzenberg 59 00:03:55,240 --> 00:03:58,560 Speaker 1: did set the stage for the Disney that we see today, 60 00:03:58,960 --> 00:04:02,760 Speaker 1: a true month of a media company that owns, you know, 61 00:04:03,440 --> 00:04:09,000 Speaker 1: practically everything. Katzenberg had a massive falling out with Eisner 62 00:04:09,240 --> 00:04:12,640 Speaker 1: in the mid nineties. However, the third piece of the 63 00:04:12,680 --> 00:04:17,520 Speaker 1: Eisner Katzenberg puzzle was a guy named Franklin G. Wells, 64 00:04:17,800 --> 00:04:19,960 Speaker 1: and he had served as the president of the Walt 65 00:04:20,040 --> 00:04:23,160 Speaker 1: Disney Company since nineteen eighty four, and he was kind 66 00:04:23,160 --> 00:04:27,320 Speaker 1: of a balancing force. He brought sort of a harmony 67 00:04:27,640 --> 00:04:31,680 Speaker 1: with Eisner and Katzenberg, and together they made great things happen. 68 00:04:32,400 --> 00:04:35,680 Speaker 1: And he also didn't report to Eisner. Eisner was the 69 00:04:35,680 --> 00:04:39,680 Speaker 1: company's CEO, but you know, Wells as president, actually didn't 70 00:04:39,720 --> 00:04:43,000 Speaker 1: report to him. Instead, he reported directly to the board. 71 00:04:43,520 --> 00:04:47,039 Speaker 1: But in ninety four, Wells died in a helicopter accident, 72 00:04:47,200 --> 00:04:51,800 Speaker 1: and things became unbalanced at the company pretty quickly. Katzenberg 73 00:04:51,960 --> 00:04:54,840 Speaker 1: wanted a bigger role at the company, and he felt 74 00:04:54,839 --> 00:04:57,920 Speaker 1: that Eisner was blogging him at every turn, and then 75 00:04:58,000 --> 00:05:01,520 Speaker 1: he was either fired or he resigned in nineteen ninety four. 76 00:05:01,640 --> 00:05:05,000 Speaker 1: The story changes depending on who's telling it, but he 77 00:05:05,120 --> 00:05:09,320 Speaker 1: was definitely bitter about the whole thing, like super bitter. 78 00:05:09,960 --> 00:05:13,159 Speaker 1: Not long after he resigned, in a huff or was 79 00:05:13,240 --> 00:05:16,320 Speaker 1: fired again, depending on who you believe. He founded a 80 00:05:16,400 --> 00:05:24,400 Speaker 1: new company with Steven Spielberg and David Geffen called DreamWorks SKG. Spielberg, Katzenberg, 81 00:05:24,680 --> 00:05:27,800 Speaker 1: Geffen get it, and it would be a new animation 82 00:05:27,960 --> 00:05:31,880 Speaker 1: and live action film studio. Katzenberg was determined to repeat 83 00:05:31,880 --> 00:05:34,600 Speaker 1: the success he had at Disney and then beat them 84 00:05:34,600 --> 00:05:37,760 Speaker 1: at their own game. If you've seen the film Shrek, 85 00:05:38,320 --> 00:05:41,880 Speaker 1: you will have seen some of Katzenberg's bitterness built right 86 00:05:42,000 --> 00:05:44,560 Speaker 1: into the movie. The movie has a sequence in which 87 00:05:44,800 --> 00:05:48,040 Speaker 1: the villain's plans for an amusement park that lampoons the 88 00:05:48,080 --> 00:05:51,640 Speaker 1: Disney theme parks plays a role, and it was definitely 89 00:05:51,680 --> 00:05:57,560 Speaker 1: a jab at Disney. Very mature anyway. DreamWorks produced several 90 00:05:57,640 --> 00:06:02,120 Speaker 1: hit films, though I would argue they aren't quite the 91 00:06:02,200 --> 00:06:06,039 Speaker 1: classics of the Disney Renaissance animated films, but that's a 92 00:06:06,080 --> 00:06:10,400 Speaker 1: discussion for a totally different podcast. A decade later, DreamWorks 93 00:06:10,440 --> 00:06:13,479 Speaker 1: spun off the animation division as its own subsidiary called, 94 00:06:13,720 --> 00:06:18,800 Speaker 1: fittingly enough, DreamWorks Animation. Katzenberg was at the helm. Katzenberg 95 00:06:18,920 --> 00:06:22,680 Speaker 1: was also an executive at the live action DreamWorks company 96 00:06:22,839 --> 00:06:26,000 Speaker 1: at least until Paramount Pictures you know, Katzenberg's old employer 97 00:06:26,480 --> 00:06:30,719 Speaker 1: purchased it in twentyd and six. In twenty fourteen, twenty 98 00:06:30,920 --> 00:06:35,119 Speaker 1: years after he founded the original DreamWorks company, Katzenberg sold 99 00:06:35,120 --> 00:06:38,680 Speaker 1: the animation studio to NBC Universal for three point eight 100 00:06:38,839 --> 00:06:43,159 Speaker 1: billion dollars. Now Katzenberg was already extremely wealthy, but he 101 00:06:43,240 --> 00:06:46,159 Speaker 1: took home a few hundred million from that sale, and 102 00:06:46,200 --> 00:06:49,160 Speaker 1: then he jumped into his next venture. To do that, 103 00:06:49,440 --> 00:06:54,040 Speaker 1: he first established a holding company in twenty seventeen called Wonderco. 104 00:06:54,360 --> 00:07:00,479 Speaker 1: It's a WndrCo. Through this company, he could establish other 105 00:07:00,600 --> 00:07:05,000 Speaker 1: ventures that you know, actually do things. Holding companies typically 106 00:07:05,040 --> 00:07:08,280 Speaker 1: only exist to own other companies, and it all has 107 00:07:08,320 --> 00:07:11,800 Speaker 1: to do with money and taxes and leadership, hierarchies and stuff. 108 00:07:12,000 --> 00:07:14,680 Speaker 1: I don't want to go into it. Quibi would become 109 00:07:14,880 --> 00:07:18,200 Speaker 1: one of the earliest ventures of this holding company, though 110 00:07:18,200 --> 00:07:21,320 Speaker 1: at the time it had a different name, New TV. 111 00:07:22,280 --> 00:07:24,920 Speaker 1: That was always intended to be something of a placeholder, 112 00:07:25,240 --> 00:07:27,880 Speaker 1: and the idea was to create a video streaming service 113 00:07:28,000 --> 00:07:31,840 Speaker 1: aimed at young adults who were increasingly relying on smartphones 114 00:07:31,880 --> 00:07:37,240 Speaker 1: to access everything. The opportunity seemed fairly obvious create a 115 00:07:37,360 --> 00:07:42,560 Speaker 1: service designed for smartphone users with short form content. Katzenberg 116 00:07:42,600 --> 00:07:46,040 Speaker 1: would make sure that the content was studio level quality, 117 00:07:46,200 --> 00:07:49,720 Speaker 1: with big names attached both to starin and direct or 118 00:07:49,760 --> 00:07:52,760 Speaker 1: produce the shows, but the stories would be designed to 119 00:07:52,760 --> 00:07:56,360 Speaker 1: play out in the time it takes to say wait 120 00:07:56,400 --> 00:07:59,560 Speaker 1: in a line to order at Starbucks, or write a 121 00:07:59,600 --> 00:08:02,920 Speaker 1: subway train or whatever. They would fill a niche that 122 00:08:03,000 --> 00:08:07,880 Speaker 1: other services didn't quite hit. Stuff on Amazon or Hulu 123 00:08:07,960 --> 00:08:11,360 Speaker 1: or Netflix was long form for the most part, requiring 124 00:08:11,440 --> 00:08:15,000 Speaker 1: longer viewing times, and the short form stuff on services 125 00:08:15,040 --> 00:08:18,920 Speaker 1: like YouTube tends to be a few or sometimes several 126 00:08:19,080 --> 00:08:23,040 Speaker 1: steps below studio quality productions, so it seemed like a 127 00:08:23,160 --> 00:08:26,400 Speaker 1: pretty solid bid. There were a lot of things Katzenberg 128 00:08:26,520 --> 00:08:29,040 Speaker 1: was going to need to do to make this idea 129 00:08:29,120 --> 00:08:31,760 Speaker 1: into a real business. He was going to need investment 130 00:08:31,800 --> 00:08:33,840 Speaker 1: money to get the ball rolling, he was going to 131 00:08:33,840 --> 00:08:36,199 Speaker 1: need someone to serve as the leader of the business, 132 00:08:36,640 --> 00:08:39,000 Speaker 1: a CEO for the company, and he was going to 133 00:08:39,040 --> 00:08:43,040 Speaker 1: need to establish agreements with studios and filmmakers to produce 134 00:08:43,080 --> 00:08:45,760 Speaker 1: content for the service and advertisers to support it. So 135 00:08:46,360 --> 00:08:49,080 Speaker 1: while new TV would spring up as an idea in 136 00:08:49,160 --> 00:08:52,240 Speaker 1: twenty seventeen, it would take a little bit longer to 137 00:08:52,280 --> 00:08:55,680 Speaker 1: become a reality. Now. One of those three tasks finding 138 00:08:55,679 --> 00:08:59,200 Speaker 1: a leader, Katzenberg would check off in early twenty eighteen. 139 00:08:59,800 --> 00:09:03,880 Speaker 1: Lead would be Meg Whitman, another famous entrepreneur in tech, 140 00:09:04,320 --> 00:09:07,319 Speaker 1: so we need to hear a bit about her story 141 00:09:07,360 --> 00:09:11,080 Speaker 1: as well. Whitman was born in nineteen fifty six in 142 00:09:11,160 --> 00:09:13,400 Speaker 1: Long Island, New York, so we got a couple of 143 00:09:13,400 --> 00:09:17,480 Speaker 1: New Yorkers here. She attended Princeton and Harvard. She earned 144 00:09:17,520 --> 00:09:20,880 Speaker 1: a master's degree in business administration, and then she went 145 00:09:20,920 --> 00:09:23,800 Speaker 1: to work for Procter and Gamble in the brand management 146 00:09:23,800 --> 00:09:27,920 Speaker 1: division in nineteen seventy nine. She got married and relocated 147 00:09:27,960 --> 00:09:31,520 Speaker 1: to California in nineteen eighty one and joined the consulting 148 00:09:31,559 --> 00:09:36,680 Speaker 1: firm Bain and Company, where presumably she fought Batman. Wait, 149 00:09:36,760 --> 00:09:40,200 Speaker 1: I'm I'm sorry, I'm being told this is a different bane. 150 00:09:40,880 --> 00:09:44,880 Speaker 1: It's spelled differently in everything. Okay, that's my bad. In 151 00:09:44,960 --> 00:09:48,280 Speaker 1: nineteen eighty nine, she became the senior vice president of 152 00:09:48,400 --> 00:09:52,600 Speaker 1: marketing of consumer products over at the Walt Disney Company. 153 00:09:53,080 --> 00:09:55,760 Speaker 1: So from eighty nine to ninety two she worked as 154 00:09:55,800 --> 00:09:59,360 Speaker 1: an executive at the same company as Katzenberg, though they 155 00:09:59,360 --> 00:10:02,280 Speaker 1: were in very diff diferent divisions of that company, Katzenberg 156 00:10:02,320 --> 00:10:05,320 Speaker 1: over in the studio side and Whitman over on a 157 00:10:05,360 --> 00:10:08,960 Speaker 1: strategic planning side. Whitman did say that part of her 158 00:10:09,000 --> 00:10:12,600 Speaker 1: job was to keep people like Katzenberg contained inside a box, 159 00:10:12,880 --> 00:10:16,480 Speaker 1: and Katzenberg hated that that was in an interview that 160 00:10:16,520 --> 00:10:19,439 Speaker 1: they gave it south by Southwest in twenty nineteen. From 161 00:10:19,520 --> 00:10:21,960 Speaker 1: ninety two to ninety eight, she worked as an executive 162 00:10:22,040 --> 00:10:25,000 Speaker 1: or leader of a few different companies, including some that 163 00:10:25,080 --> 00:10:28,920 Speaker 1: were difficult to manage. In nineteen ninety eight, a headhunter 164 00:10:29,040 --> 00:10:32,720 Speaker 1: approached her about joining a new startup called eBay, and 165 00:10:32,800 --> 00:10:35,640 Speaker 1: it took some convincing, but she eventually agreed to be 166 00:10:35,880 --> 00:10:38,800 Speaker 1: the company's president and CEO. Now at that point when 167 00:10:38,840 --> 00:10:42,680 Speaker 1: she joined, eBay had about thirty employees. By the time 168 00:10:42,720 --> 00:10:45,120 Speaker 1: Whitman left the company in two thousand and eight, the 169 00:10:45,240 --> 00:10:48,520 Speaker 1: number was closer to fifteen thousand. She had seen the 170 00:10:48,520 --> 00:10:52,560 Speaker 1: company grow tremendously and kept it afloat even after the 171 00:10:52,600 --> 00:10:55,000 Speaker 1: dot com bubble burst in two thousand and two thousand 172 00:10:55,040 --> 00:10:58,320 Speaker 1: and one. Oh And also while at eBay, Whitman would 173 00:10:58,440 --> 00:11:02,520 Speaker 1: join the board of directors of drum Roll Please dream Works, 174 00:11:02,960 --> 00:11:06,679 Speaker 1: bringing her back along with Kabzenberg after retiring from eBay, 175 00:11:06,880 --> 00:11:09,840 Speaker 1: Whitman turned her hand to politics. She ran for governor 176 00:11:09,880 --> 00:11:13,520 Speaker 1: of California in two thousand and eight and spent millions 177 00:11:13,640 --> 00:11:16,680 Speaker 1: of dollars, including an enormous amount of her own money, 178 00:11:16,920 --> 00:11:20,319 Speaker 1: on her campaign. She actually broke the record for campaign 179 00:11:20,400 --> 00:11:23,320 Speaker 1: spending in the United States. In the process. She got 180 00:11:23,360 --> 00:11:27,800 Speaker 1: the Republican nomination for governor, but ultimately lost the election 181 00:11:27,960 --> 00:11:31,640 Speaker 1: to Jerry Brown. In twenty eleven, she joined the Hewitt 182 00:11:31,679 --> 00:11:34,760 Speaker 1: Packard board of directors and became the president and CEO 183 00:11:34,960 --> 00:11:38,040 Speaker 1: of the company. Four years later, she was in charge 184 00:11:38,080 --> 00:11:41,680 Speaker 1: when HP split into two separate companies. One of those 185 00:11:41,800 --> 00:11:46,480 Speaker 1: was HP Incorporated, which encompassed the consumer products division like 186 00:11:46,559 --> 00:11:50,400 Speaker 1: printers and computers, and the other was Hewitt Packard Enterprise, 187 00:11:50,480 --> 00:11:53,440 Speaker 1: which is a business to business company offering products and 188 00:11:53,480 --> 00:11:57,640 Speaker 1: services to corporate customers. Whitman made the move over to 189 00:11:57,840 --> 00:12:01,800 Speaker 1: HP Enterprise and served as CEO until she announced her 190 00:12:01,840 --> 00:12:05,400 Speaker 1: retirement in November twenty seventeen, although she wouldn't actually step 191 00:12:05,520 --> 00:12:09,880 Speaker 1: down until the following February. In late January twenty eighteen, 192 00:12:10,280 --> 00:12:13,880 Speaker 1: news broke that Meg Whitman would become the head of 193 00:12:14,000 --> 00:12:18,520 Speaker 1: Katzenberg's new media company, then known as new TV, and 194 00:12:18,559 --> 00:12:21,640 Speaker 1: she would also be the first official employee of that 195 00:12:21,720 --> 00:12:26,360 Speaker 1: company and officially started work in March twenty eighteen. Katzenberg 196 00:12:26,360 --> 00:12:28,719 Speaker 1: would serve as chairman of the board and a bit 197 00:12:28,720 --> 00:12:32,319 Speaker 1: of a busy body. At that same time, news outlets 198 00:12:32,320 --> 00:12:35,600 Speaker 1: were reporting that this fledgling startup had a pretty massive 199 00:12:35,679 --> 00:12:40,000 Speaker 1: goal for raising investments to the tune of two billion 200 00:12:40,120 --> 00:12:44,760 Speaker 1: with a b dollars a princely sum. We call startups 201 00:12:44,760 --> 00:12:49,319 Speaker 1: that reach evaluation of a billion dollars unicorns. Katzenberg was 202 00:12:49,360 --> 00:12:52,280 Speaker 1: looking to make new TV a unicorn right out of 203 00:12:52,280 --> 00:12:55,680 Speaker 1: the gate, and this is probably something that I should 204 00:12:55,720 --> 00:13:00,160 Speaker 1: cover for a second. Valuing a startup is a very 205 00:13:00,200 --> 00:13:04,680 Speaker 1: tricky thing, largely because startups frequently can go months or 206 00:13:04,880 --> 00:13:08,760 Speaker 1: years before having any real means of generating revenue, so 207 00:13:09,080 --> 00:13:12,880 Speaker 1: they stay in business by raising investments over and over again. 208 00:13:13,120 --> 00:13:16,480 Speaker 1: A brand new company may have nothing to sell, which 209 00:13:16,520 --> 00:13:19,640 Speaker 1: means there's no way for money to come into the business, 210 00:13:19,880 --> 00:13:21,480 Speaker 1: and the goal is to get to a point where 211 00:13:21,559 --> 00:13:25,280 Speaker 1: you're either bringing in revenue, or more specifically, you're bringing 212 00:13:25,280 --> 00:13:28,360 Speaker 1: in enough revenue to both cover all of your operating 213 00:13:28,400 --> 00:13:31,480 Speaker 1: expenses and still have some leftover. You know what, we 214 00:13:31,520 --> 00:13:34,800 Speaker 1: would call profits, But a lot of startups have no 215 00:13:35,000 --> 00:13:37,280 Speaker 1: means of bringing in revenue right away. They may be 216 00:13:37,360 --> 00:13:41,240 Speaker 1: based around an idea that is compelling and exciting and 217 00:13:41,360 --> 00:13:44,120 Speaker 1: that could potentially bring in a lot of revenue down 218 00:13:44,160 --> 00:13:46,679 Speaker 1: the line, but it will take time to execute upon that. 219 00:13:46,760 --> 00:13:50,080 Speaker 1: In the meantime, the startups still have operating expenses. They 220 00:13:50,080 --> 00:13:53,240 Speaker 1: have to pay employees and spend money on office space 221 00:13:53,320 --> 00:13:56,000 Speaker 1: and stuff like that. So the challenge for a startup 222 00:13:56,080 --> 00:13:58,760 Speaker 1: is to convince investors that the idea is solid and 223 00:13:58,800 --> 00:14:00,800 Speaker 1: a money maker in the long run, and that the 224 00:14:00,840 --> 00:14:03,640 Speaker 1: people in charge are capable of taking that idea and 225 00:14:03,679 --> 00:14:06,920 Speaker 1: making it a reality. The investors can pour enough money 226 00:14:06,920 --> 00:14:09,720 Speaker 1: into the startup to foot the bill for operating expenses, 227 00:14:10,160 --> 00:14:12,199 Speaker 1: banking on the bet that this will pay off in 228 00:14:12,240 --> 00:14:14,200 Speaker 1: the long run and that they will get a big 229 00:14:14,240 --> 00:14:18,240 Speaker 1: return on their initial investment. Or they could just really 230 00:14:18,320 --> 00:14:21,160 Speaker 1: hope that the company gets bought up by a larger 231 00:14:21,280 --> 00:14:23,760 Speaker 1: entity and everyone gets a big payout just for coming 232 00:14:23,840 --> 00:14:26,760 Speaker 1: up with a really cool idea. A media company in 233 00:14:26,800 --> 00:14:31,400 Speaker 1: particular is a really expensive endeavor, especially one that's aimed 234 00:14:31,440 --> 00:14:36,560 Speaker 1: at producing original and exclusive, highly produced content. So while 235 00:14:36,600 --> 00:14:40,680 Speaker 1: two billion dollars is a truly enormous amount of money. 236 00:14:40,840 --> 00:14:45,000 Speaker 1: It was also not exactly an unrealistic need. If New 237 00:14:45,040 --> 00:14:48,160 Speaker 1: TV was going to launch a new streaming service with 238 00:14:48,240 --> 00:14:52,239 Speaker 1: a broad variety of original programming, much of its studio 239 00:14:52,440 --> 00:14:57,240 Speaker 1: quality production, and backed by known entities in the entertainment industry, 240 00:14:57,440 --> 00:14:59,960 Speaker 1: it was going to cost a lot before the service 241 00:15:00,160 --> 00:15:03,800 Speaker 1: ever became available for customers, and so Whitman and Katzenberg 242 00:15:04,240 --> 00:15:06,880 Speaker 1: began to have a lot of meetings with potential investors, 243 00:15:07,280 --> 00:15:11,120 Speaker 1: and those meetings paid off. I'll explain more after this 244 00:15:11,320 --> 00:15:23,560 Speaker 1: short break. The temporary digs for new TV slash Quibi 245 00:15:24,160 --> 00:15:27,200 Speaker 1: was in a shared working space in Los Angeles owned 246 00:15:27,200 --> 00:15:31,400 Speaker 1: by Serendipity Labs. Coworking spaces are a topic that I 247 00:15:31,400 --> 00:15:34,600 Speaker 1: should probably tackle at some point, though it's really only 248 00:15:34,680 --> 00:15:38,320 Speaker 1: tangentially related to technology. It served as a base of 249 00:15:38,360 --> 00:15:41,360 Speaker 1: operations for doing the legwork of getting investments and interviewing 250 00:15:41,360 --> 00:15:45,000 Speaker 1: potential team members, and it was only temporary. Later on 251 00:15:45,040 --> 00:15:47,840 Speaker 1: they would move into what has been described as lavishly 252 00:15:48,440 --> 00:15:54,160 Speaker 1: decorated and expansive headquarters now according to Variety, by August 253 00:15:54,280 --> 00:15:58,920 Speaker 1: twenty eighteen, the company had fewer than ten employees, and 254 00:15:59,000 --> 00:16:02,520 Speaker 1: Meg Whitman said that she and Jeffrey Katzenberg spent half 255 00:16:02,560 --> 00:16:06,000 Speaker 1: to three fourths of their time interviewing potential executives to 256 00:16:06,080 --> 00:16:10,280 Speaker 1: join the group. While the streaming media landscape wasn't as 257 00:16:10,480 --> 00:16:14,760 Speaker 1: ludicrously crowded in twenty eighteen as it is today, launching 258 00:16:14,800 --> 00:16:18,160 Speaker 1: a brand new competitor at that time with original programming 259 00:16:18,280 --> 00:16:22,040 Speaker 1: and no major established brand behind it like Disney or 260 00:16:22,160 --> 00:16:26,720 Speaker 1: HBO was a pretty gutsy move. When Katzenberg and Whitman 261 00:16:26,800 --> 00:16:30,240 Speaker 1: started looking for investors, I'm sure they frequently had to 262 00:16:30,240 --> 00:16:33,040 Speaker 1: dismiss the argument that their service would have to compete 263 00:16:33,040 --> 00:16:39,040 Speaker 1: against Netflix, Amazon Prime, Hulu, CBS All Access, YouTube, Premium, 264 00:16:39,280 --> 00:16:43,400 Speaker 1: HBO Now, not to mention numerous other services. But their 265 00:16:43,440 --> 00:16:47,320 Speaker 1: sales pitch was that this new service would really focus 266 00:16:47,360 --> 00:16:49,800 Speaker 1: on the mobile market. The content would be made with 267 00:16:50,000 --> 00:16:53,400 Speaker 1: smartphone users in mind from the beginning, not just in 268 00:16:53,480 --> 00:16:56,200 Speaker 1: the length of content, but in the actual way it 269 00:16:56,240 --> 00:16:59,000 Speaker 1: shows up on screen. It was going to be optimized 270 00:16:59,160 --> 00:17:02,680 Speaker 1: for the mobile experience. As long as the content was 271 00:17:02,760 --> 00:17:06,520 Speaker 1: good and the experience was compelling, they argued, it would work. 272 00:17:06,960 --> 00:17:09,480 Speaker 1: It would scratch an itch that people had, even if 273 00:17:09,520 --> 00:17:12,000 Speaker 1: they didn't know they had it, and it wouldn't require 274 00:17:12,119 --> 00:17:15,479 Speaker 1: viewers to break up a movie or show into smaller chunks, 275 00:17:16,040 --> 00:17:18,439 Speaker 1: because that had already been done for them. The content 276 00:17:18,480 --> 00:17:22,160 Speaker 1: on the service would already be in those small chunks. Still, 277 00:17:22,480 --> 00:17:24,760 Speaker 1: it had to be a tough sell. And heck, it's 278 00:17:24,800 --> 00:17:28,439 Speaker 1: not like no one had ever tried something like this. Already, 279 00:17:28,800 --> 00:17:32,359 Speaker 1: Verizon had spent more than a billion dollars launching a 280 00:17:32,400 --> 00:17:36,880 Speaker 1: service called Go ninety. This service included original short form 281 00:17:36,960 --> 00:17:41,439 Speaker 1: videos as well as licensed content from network television. The 282 00:17:41,520 --> 00:17:44,399 Speaker 1: service was free to Verizon users, with the idea that 283 00:17:44,480 --> 00:17:47,080 Speaker 1: advertisers would leap to be part of a service that 284 00:17:47,200 --> 00:17:49,480 Speaker 1: was marketed to twenty five to thirty five year olds, 285 00:17:49,880 --> 00:17:52,640 Speaker 1: and that's what would bring in revenue since these folks 286 00:17:52,720 --> 00:17:55,280 Speaker 1: were spending more and more time on their phones. The 287 00:17:55,320 --> 00:17:59,240 Speaker 1: only problem was it flopped. Verizon pulled the plug in 288 00:17:59,280 --> 00:18:02,320 Speaker 1: the summer of twenty eighteen, and that I'm sure made 289 00:18:02,440 --> 00:18:05,840 Speaker 1: Quibi's business case even harder to sell now if it 290 00:18:05,880 --> 00:18:08,520 Speaker 1: weren't for the fact that you had the pairing of Katzenberg, 291 00:18:08,560 --> 00:18:11,600 Speaker 1: who had spent his entire professional career in media and 292 00:18:11,720 --> 00:18:15,119 Speaker 1: much of it in leadership positions, and Whitman, who had 293 00:18:15,160 --> 00:18:18,760 Speaker 1: gained notoriety for taking a small internet startup into a 294 00:18:18,800 --> 00:18:23,560 Speaker 1: publicly traded, enormous company. I don't think new TV would 295 00:18:23,600 --> 00:18:27,479 Speaker 1: have received an enthusiastic reception among investors, but the pair's 296 00:18:27,560 --> 00:18:31,240 Speaker 1: expertise and business acumen were undeniable, and the list of 297 00:18:31,280 --> 00:18:35,320 Speaker 1: investors grew relatively quickly. That list included a lot of 298 00:18:35,440 --> 00:18:39,320 Speaker 1: established media companies. In fact, all the major studios would 299 00:18:39,320 --> 00:18:46,560 Speaker 1: become investors, so that included companies like Sony, Viacom, WarnerMedia, MGM, Lionsgate, 300 00:18:46,640 --> 00:18:51,840 Speaker 1: and even Katzenberg's old target, Disney. In addition, there were 301 00:18:51,880 --> 00:18:55,480 Speaker 1: other companies investing as well, such as Liberty Global and 302 00:18:55,640 --> 00:18:59,879 Speaker 1: Ali Baba. All told, the first round of venture capital funding, 303 00:19:00,040 --> 00:19:03,920 Speaker 1: which closed on July thirty first, twenty eighteen, raised around 304 00:19:04,080 --> 00:19:08,560 Speaker 1: one billion dollars, pretty impressive for a business that had 305 00:19:08,600 --> 00:19:12,240 Speaker 1: no product yet. In addition to that money, the holding 306 00:19:12,320 --> 00:19:16,560 Speaker 1: company Wanderco, had secured seven hundred and fifty million dollars 307 00:19:16,560 --> 00:19:20,080 Speaker 1: of its own Now, that was not just for new TV, 308 00:19:20,320 --> 00:19:23,960 Speaker 1: though Variety reported that quote a good portion end quote 309 00:19:24,040 --> 00:19:27,480 Speaker 1: of it was going into the venture. It wasn't quite 310 00:19:27,520 --> 00:19:30,000 Speaker 1: two billion dollars, but my goodness, it was a lot 311 00:19:30,040 --> 00:19:35,440 Speaker 1: of money. Wonderco would be quote a significant shareholder end quote, 312 00:19:35,480 --> 00:19:39,920 Speaker 1: but not a majority shareholder in this company. Katzenberg was 313 00:19:39,960 --> 00:19:43,520 Speaker 1: playing KOI with evaluation of New TV. He declined to 314 00:19:43,560 --> 00:19:48,080 Speaker 1: disclose how the company was being valued, at least publicly. 315 00:19:48,680 --> 00:19:51,160 Speaker 1: The biggest investor of the group was actually a firm 316 00:19:51,240 --> 00:19:54,439 Speaker 1: called Madrone Capital, which was headed by the chairman of 317 00:19:54,520 --> 00:19:58,840 Speaker 1: the Walmart chain of stores, Greg Penner. One decision the 318 00:19:58,920 --> 00:20:01,320 Speaker 1: leaders made early on was that new TV was not 319 00:20:01,359 --> 00:20:05,119 Speaker 1: going to produce content itself. Instead, it was going to 320 00:20:05,200 --> 00:20:10,160 Speaker 1: partner with established entertainment producers and license programming from them. 321 00:20:10,400 --> 00:20:13,800 Speaker 1: Through these licensing agreements, new TV would cover the costs 322 00:20:13,880 --> 00:20:16,959 Speaker 1: of production plus some and it also meant that new 323 00:20:17,000 --> 00:20:19,719 Speaker 1: TV would have a lot of different entities producing content 324 00:20:19,800 --> 00:20:22,560 Speaker 1: for the platform that would help the company avoid having 325 00:20:22,640 --> 00:20:26,600 Speaker 1: a production bottleneck. Katzenberg said in interviews that to have 326 00:20:26,640 --> 00:20:31,040 Speaker 1: a successful launch, the service would need a lot of content, 327 00:20:31,119 --> 00:20:33,560 Speaker 1: and not just a big quantity of it, but a 328 00:20:33,640 --> 00:20:36,639 Speaker 1: variety of content as well. To appeal to a broad 329 00:20:36,680 --> 00:20:40,600 Speaker 1: spectrum of audiences. Some folks might be big fans of action, 330 00:20:40,840 --> 00:20:44,840 Speaker 1: while others prefer horror or comedy or and I hate 331 00:20:44,920 --> 00:20:49,119 Speaker 1: to use this phrase, reality television. I'm something of a 332 00:20:49,160 --> 00:20:52,080 Speaker 1: snob in that regard, not to mention, you know, I 333 00:20:52,160 --> 00:20:55,359 Speaker 1: worked for a company that made reality television stuff, so 334 00:20:55,480 --> 00:20:58,040 Speaker 1: I had a chance to see, you know how totally 335 00:20:58,080 --> 00:21:03,600 Speaker 1: not real. It can get enough editorializing. Katzenberg also stated 336 00:21:03,760 --> 00:21:06,600 Speaker 1: that the licensing deal they had in place was quote 337 00:21:06,800 --> 00:21:11,080 Speaker 1: highly highly appealing into quote to entertainment studios. Now, I 338 00:21:11,119 --> 00:21:13,879 Speaker 1: don't know any of the details of those deals, like 339 00:21:14,080 --> 00:21:17,000 Speaker 1: whether or not there's an expiration on the license, meaning, 340 00:21:17,200 --> 00:21:20,480 Speaker 1: you know, some content might eventually disappear off the platform. 341 00:21:20,880 --> 00:21:24,119 Speaker 1: If you've got a Netflix subscription, you're probably familiar with 342 00:21:24,160 --> 00:21:27,359 Speaker 1: this trend. Honestly, I'm still upset that the sketch show 343 00:21:27,480 --> 00:21:32,320 Speaker 1: that Mitchell and weblook disappeared from US Netflix streaming. But anyway, 344 00:21:32,560 --> 00:21:36,280 Speaker 1: Vulture reported that the deals typically included the cost of 345 00:21:36,320 --> 00:21:41,520 Speaker 1: production plus another twenty percent, so that's not bad. Now. 346 00:21:41,560 --> 00:21:44,399 Speaker 1: At this point, the venture was still called new TV, 347 00:21:44,560 --> 00:21:46,199 Speaker 1: and the plan was to launch by the end of 348 00:21:46,200 --> 00:21:50,320 Speaker 1: twenty nineteen. That would mean building out the infrastructure, building 349 00:21:50,400 --> 00:21:54,320 Speaker 1: the app itself, securing the cloud services, or building them. 350 00:21:54,359 --> 00:21:56,920 Speaker 1: But my guess is that Quibi relies on a major 351 00:21:57,040 --> 00:22:00,719 Speaker 1: vendor to host the actual service, licensing all the content 352 00:22:00,800 --> 00:22:03,840 Speaker 1: for launch, figuring out the marketing strategy, and getting those 353 00:22:03,920 --> 00:22:08,080 Speaker 1: advertising deals in place. As for revenue, that was really 354 00:22:08,119 --> 00:22:11,679 Speaker 1: something that Whitman and Katzenberg actually had concrete plans for, 355 00:22:11,840 --> 00:22:14,800 Speaker 1: which is a nice change of pace with startups. Typically, 356 00:22:14,800 --> 00:22:17,160 Speaker 1: when I do talk about startups, the details around how 357 00:22:17,200 --> 00:22:19,720 Speaker 1: the company is actually going to make money get a 358 00:22:19,720 --> 00:22:22,280 Speaker 1: little fuzzy. In fact, I suspect a lot of startup 359 00:22:22,320 --> 00:22:24,400 Speaker 1: founders are just hoping that a bigger fish is going 360 00:22:24,440 --> 00:22:27,800 Speaker 1: to come along and scoop up their company, buying it 361 00:22:27,840 --> 00:22:30,760 Speaker 1: for a ridiculous amount of money, and then some bigger 362 00:22:30,800 --> 00:22:33,520 Speaker 1: companies then saddled with a service that might not ever 363 00:22:33,600 --> 00:22:37,080 Speaker 1: even generate revenue. But this was not one of those cases. 364 00:22:37,359 --> 00:22:40,000 Speaker 1: From the start, the plan was to offer two tiers 365 00:22:40,119 --> 00:22:43,800 Speaker 1: of subscription service. One would be an advertising light option, 366 00:22:44,400 --> 00:22:47,879 Speaker 1: kind of similar to how Hulu operates, where the subscription 367 00:22:47,960 --> 00:22:51,680 Speaker 1: fees would be subsidized by in app advertising. It would 368 00:22:51,680 --> 00:22:56,639 Speaker 1: happen in between those short videos. The second option was 369 00:22:56,680 --> 00:22:59,840 Speaker 1: to be an advertising free plan, in which subscribers would 370 00:22:59,840 --> 00:23:02,840 Speaker 1: pay a little bit more but would be spared ads. 371 00:23:03,560 --> 00:23:07,360 Speaker 1: Generally speaking, Whitman said her job was to focus on 372 00:23:07,560 --> 00:23:12,280 Speaker 1: business strategy, well, Katzenberg would spend his efforts on securing content, 373 00:23:12,960 --> 00:23:16,760 Speaker 1: and they must have been working pretty darn hard. Whitman 374 00:23:16,880 --> 00:23:20,159 Speaker 1: told the press that new TV was merely a placeholder 375 00:23:20,240 --> 00:23:22,760 Speaker 1: name and that they would soon announce a new official 376 00:23:22,840 --> 00:23:26,560 Speaker 1: name for the service, and sure enough, in October twenty eighteen, 377 00:23:26,840 --> 00:23:31,280 Speaker 1: the new name was launched. New TV officially became Quibi. 378 00:23:31,840 --> 00:23:36,159 Speaker 1: Now the word quibi Quibi is a combination of the 379 00:23:36,240 --> 00:23:39,840 Speaker 1: words quick and bite, because that's what the content on 380 00:23:39,880 --> 00:23:43,040 Speaker 1: the service is all about, quick bites of content, whether 381 00:23:43,119 --> 00:23:46,840 Speaker 1: it's drama or comedy or whatever. Around that same time, 382 00:23:47,240 --> 00:23:50,840 Speaker 1: Katzenberg announced that filmmaker Guillema del Toro, who has made 383 00:23:50,840 --> 00:23:55,159 Speaker 1: some truly phenomenal films that I adore, would be making 384 00:23:55,200 --> 00:24:00,000 Speaker 1: some sort of zombie story. Sam Raimi, another filmmaker who's 385 00:24:00,119 --> 00:24:03,360 Speaker 1: work I love, would be producing a horror anthology called 386 00:24:03,440 --> 00:24:07,560 Speaker 1: Fifty States of Fright, about folklore and urban legends in 387 00:24:07,680 --> 00:24:11,040 Speaker 1: the States of the United States. Jason Blum also had 388 00:24:11,080 --> 00:24:14,159 Speaker 1: a project announced, so at least when it came to horror, 389 00:24:14,240 --> 00:24:18,160 Speaker 1: Quibi was shaping up nicely. But while various productions may 390 00:24:18,200 --> 00:24:22,439 Speaker 1: have begun, there wasn't anything to show off yet just 391 00:24:22,680 --> 00:24:27,640 Speaker 1: the idea, which admittedly sounded pretty interesting. I mean, whenever 392 00:24:27,720 --> 00:24:31,440 Speaker 1: anyone has more than a moment of nothing that's going on, 393 00:24:31,840 --> 00:24:35,320 Speaker 1: they tend to whip out their phone. Creating content specifically 394 00:24:35,320 --> 00:24:38,639 Speaker 1: to entertain people who do that sort of thing makes sense, 395 00:24:39,160 --> 00:24:42,920 Speaker 1: and grabbing big names in entertainment would help raise Quibi's 396 00:24:42,960 --> 00:24:45,480 Speaker 1: profile as well as act as a great draw for 397 00:24:45,600 --> 00:24:49,400 Speaker 1: curious fans. At least that was the idea. In twenty nineteen, 398 00:24:49,640 --> 00:24:53,359 Speaker 1: Whitman and Katzenberg were still making the rounds at various conferences, 399 00:24:53,480 --> 00:24:57,359 Speaker 1: talking up the service and announcing new content partners and projects. 400 00:24:57,800 --> 00:25:01,760 Speaker 1: At south By Southwest in twenty nineteen, Hey, you guys 401 00:25:01,800 --> 00:25:05,199 Speaker 1: remember when we used to have south By Man. I 402 00:25:05,240 --> 00:25:08,000 Speaker 1: feel awful for all the people who are counting on 403 00:25:08,040 --> 00:25:11,040 Speaker 1: it this year. Anyway. At south By in twenty nineteen, 404 00:25:11,320 --> 00:25:15,240 Speaker 1: Katzenberg and Whitman delivered a keynote about Quibbi and gave 405 00:25:15,280 --> 00:25:18,640 Speaker 1: a little bit more information about their plans. At this keynote, 406 00:25:18,760 --> 00:25:22,240 Speaker 1: Katzenberg made another case for Quibi, this time to consumers. 407 00:25:22,680 --> 00:25:25,679 Speaker 1: He said that the analogy he liked was Dan Brown's 408 00:25:25,720 --> 00:25:29,520 Speaker 1: novel The Da Vinji Code. Katzenberg said that that book 409 00:25:29,560 --> 00:25:32,480 Speaker 1: is four hundred and sixty four pages long with one 410 00:25:32,560 --> 00:25:36,000 Speaker 1: hundred and five chapters, which means it averages out to 411 00:25:36,080 --> 00:25:39,720 Speaker 1: fewer than five pages per chapter. The result of this 412 00:25:39,880 --> 00:25:41,879 Speaker 1: is that you could read a chapter in just a 413 00:25:41,880 --> 00:25:44,480 Speaker 1: few minutes, and you could read as many or as 414 00:25:44,480 --> 00:25:46,600 Speaker 1: few as you liked. You could put the book down, 415 00:25:46,800 --> 00:25:48,879 Speaker 1: you could pick it back up later and just continue on. 416 00:25:49,680 --> 00:25:53,200 Speaker 1: Brown structured the book so that the chapters were discrete 417 00:25:53,280 --> 00:25:55,919 Speaker 1: units of story, with the end of one being almost 418 00:25:55,920 --> 00:25:59,760 Speaker 1: like a cliffhanger for the beginning of the next one. Now, personally, 419 00:26:00,359 --> 00:26:04,520 Speaker 1: I found this style to be exhausting. I hate it, 420 00:26:05,280 --> 00:26:07,720 Speaker 1: But I'm in the minority here that the book was 421 00:26:07,760 --> 00:26:11,200 Speaker 1: a massive hit, and I'm old. I mean, I feel 422 00:26:11,200 --> 00:26:14,560 Speaker 1: the same way about Mulin Rouge. Can't stand the movie 423 00:26:15,040 --> 00:26:18,320 Speaker 1: because the camera never stays on anything for more than 424 00:26:18,359 --> 00:26:22,199 Speaker 1: a second. But then again, I'm old, So I'm not 425 00:26:22,320 --> 00:26:25,080 Speaker 1: saying that this style is a bad thing. It's just 426 00:26:25,160 --> 00:26:28,880 Speaker 1: not my thing. But maybe it's the thing that lots 427 00:26:28,880 --> 00:26:31,800 Speaker 1: of young people like. That was the target audience anyway. 428 00:26:32,160 --> 00:26:35,280 Speaker 1: Katzenberg said the goal of Quibi was to allow storytellers 429 00:26:35,280 --> 00:26:38,440 Speaker 1: to craft content with that sort of short form in mind. 430 00:26:38,880 --> 00:26:43,160 Speaker 1: The overall story could be very long, feature links or longer, 431 00:26:43,359 --> 00:26:46,119 Speaker 1: but the chapters of the story would be ten minutes 432 00:26:46,200 --> 00:26:49,960 Speaker 1: or less, with ad breaks in between them. The pair 433 00:26:50,040 --> 00:26:52,679 Speaker 1: also revealed that the Quibi app would allow users to 434 00:26:52,720 --> 00:26:56,600 Speaker 1: view videos either in portrait or in landscape mode, so 435 00:26:56,760 --> 00:27:00,600 Speaker 1: either holding a phone vertically or horizontally, and in either 436 00:27:00,720 --> 00:27:04,680 Speaker 1: case the movie would be full screen. Witman in particular 437 00:27:04,800 --> 00:27:08,240 Speaker 1: mentioned that this experience was unlike other streaming services that 438 00:27:08,320 --> 00:27:11,960 Speaker 1: work on mobile, with some stuck purely in one mode 439 00:27:12,080 --> 00:27:14,680 Speaker 1: or the other and others creating a large amount of 440 00:27:14,760 --> 00:27:18,400 Speaker 1: unused space when you go from landscape to portrait. Katzenberg 441 00:27:18,520 --> 00:27:22,760 Speaker 1: also differentiated Quibi from YouTube. He pointed out that content 442 00:27:22,840 --> 00:27:26,359 Speaker 1: creators can make videos for YouTube and make money off 443 00:27:26,480 --> 00:27:29,879 Speaker 1: those videos, but the advertising model on YouTube means that 444 00:27:30,119 --> 00:27:32,960 Speaker 1: as a creator, you have a limit of how much 445 00:27:33,000 --> 00:27:35,399 Speaker 1: you can spend per minute. You can only spend up 446 00:27:35,440 --> 00:27:40,200 Speaker 1: to three thousand dollars per minute, which that's already incredible 447 00:27:40,240 --> 00:27:43,200 Speaker 1: to me, but after that you won't make enough money 448 00:27:43,240 --> 00:27:46,159 Speaker 1: to cover the costs. And while that works great for 449 00:27:46,240 --> 00:27:50,480 Speaker 1: someone who's making load to maybe mid level production videos, 450 00:27:51,080 --> 00:27:54,119 Speaker 1: high end production stuff you know, like movies and television 451 00:27:54,440 --> 00:27:57,840 Speaker 1: can cost upwards of one hundred thousand dollars per minute, 452 00:27:57,920 --> 00:28:02,200 Speaker 1: and so he argued, Whibby has a place because it 453 00:28:02,240 --> 00:28:05,520 Speaker 1: would allow for that kind of high production content that 454 00:28:05,560 --> 00:28:09,560 Speaker 1: YouTube just can't support. Whitman added that the timing for 455 00:28:09,640 --> 00:28:13,600 Speaker 1: Quibi was lining up with the rollout for five G networks, 456 00:28:13,960 --> 00:28:17,359 Speaker 1: and just for a quick recap, five G is actually 457 00:28:17,440 --> 00:28:21,800 Speaker 1: a general description for the next generation of wireless network technologies. 458 00:28:22,200 --> 00:28:25,600 Speaker 1: There are actually many different flavors of five G. The 459 00:28:25,680 --> 00:28:29,000 Speaker 1: relevant bit here is that these technologies will allow for 460 00:28:29,119 --> 00:28:33,639 Speaker 1: much larger filesized transfers across a network at any given moment, 461 00:28:34,119 --> 00:28:37,119 Speaker 1: so you can watch something like a high resolution video 462 00:28:37,280 --> 00:28:40,040 Speaker 1: on a mobile device without having to worry about stuff 463 00:28:40,080 --> 00:28:43,280 Speaker 1: like buffering. Now, there are a couple of things outside 464 00:28:43,320 --> 00:28:48,600 Speaker 1: of Quibi's control that didn't really come up in these conferences. Sure, 465 00:28:48,880 --> 00:28:52,280 Speaker 1: five G would be a great help to Quiby's use case, 466 00:28:52,600 --> 00:28:54,840 Speaker 1: but then you also have to worry about stuff like 467 00:28:55,000 --> 00:28:59,520 Speaker 1: battery life pulling down big files and playing high resolution video. 468 00:28:59,600 --> 00:29:03,200 Speaker 1: Consumers a lot of battery power, and battery technology just 469 00:29:03,280 --> 00:29:07,400 Speaker 1: doesn't evolve as quickly as some other technologies do, so 470 00:29:07,640 --> 00:29:12,160 Speaker 1: that's a potential bottleneck, and another big one is data caps. 471 00:29:12,400 --> 00:29:15,600 Speaker 1: If the company providing network service to your device places 472 00:29:15,640 --> 00:29:17,680 Speaker 1: caps on how much data you can use in a month, 473 00:29:18,000 --> 00:29:20,720 Speaker 1: and app designed to push big video files for you 474 00:29:21,080 --> 00:29:23,440 Speaker 1: up to twenty minutes a day could end up being 475 00:29:23,520 --> 00:29:27,719 Speaker 1: super expensive because of data overage fees. As for that 476 00:29:27,800 --> 00:29:31,000 Speaker 1: twenty minute figure, Katzenbriggs said that was kind of their 477 00:29:31,080 --> 00:29:34,120 Speaker 1: target to create a service where users would spend twenty 478 00:29:34,520 --> 00:29:37,880 Speaker 1: of the seventy minutes a day on average that they 479 00:29:37,920 --> 00:29:41,120 Speaker 1: would watch video on their phones. This time those twenty 480 00:29:41,120 --> 00:29:44,480 Speaker 1: minutes would go to Quibi. Again, Quibi doesn't have control 481 00:29:44,640 --> 00:29:47,480 Speaker 1: over this stuff, but then if they're going to talk 482 00:29:47,520 --> 00:29:50,000 Speaker 1: about how five G is helping their case, I think 483 00:29:50,040 --> 00:29:53,000 Speaker 1: they have to acknowledge how these other factors are challenges 484 00:29:53,080 --> 00:29:56,160 Speaker 1: to overcome. Now, when we come back, I'll talk a 485 00:29:56,160 --> 00:29:58,600 Speaker 1: bit more about the lead up to the launch and 486 00:29:58,640 --> 00:30:02,600 Speaker 1: what has happened since, But first let's take another quick break. 487 00:30:10,000 --> 00:30:14,400 Speaker 1: The content plan for Quibi was incredibly ambitious. The idea 488 00:30:14,600 --> 00:30:18,040 Speaker 1: is for the service to launch a Lighthouse series every 489 00:30:18,200 --> 00:30:23,040 Speaker 1: other week. A lighthouse series is a prestige story consisting 490 00:30:23,040 --> 00:30:27,400 Speaker 1: of several chapters that collectively would make the story feature length. 491 00:30:27,520 --> 00:30:31,720 Speaker 1: So every other Monday Quibi would launch a news series 492 00:30:31,760 --> 00:30:35,160 Speaker 1: consisting of ten to fifteen chapters or so of episodes, 493 00:30:35,480 --> 00:30:39,000 Speaker 1: each around ten minutes in length. In addition, the service 494 00:30:39,000 --> 00:30:42,640 Speaker 1: has news shows that update daily, clip shows that show 495 00:30:42,720 --> 00:30:49,720 Speaker 1: sports highlights, documentaries, reality TV shows, competition shows, entertainment news shows. 496 00:30:49,760 --> 00:30:53,200 Speaker 1: The list goes on. Katzenberg said the service would launch 497 00:30:53,280 --> 00:30:57,680 Speaker 1: one hundred new short videos on Quibi every week, so 498 00:30:58,160 --> 00:31:01,360 Speaker 1: that means more than five thousand per year. In fact, 499 00:31:01,360 --> 00:31:03,440 Speaker 1: for the first year, the idea was to release eight 500 00:31:03,520 --> 00:31:08,800 Speaker 1: than five hundred Quibis. It's a truly enormous amount of content, 501 00:31:09,240 --> 00:31:11,920 Speaker 1: so it's no wonder that the company was still seeking 502 00:31:11,960 --> 00:31:15,840 Speaker 1: out an additional one billion dollars in funding in twenty nineteen, 503 00:31:16,280 --> 00:31:19,640 Speaker 1: after having already secured more than a billion the year before. 504 00:31:19,920 --> 00:31:23,120 Speaker 1: By the end of twenty nineteen, the streaming landscape had 505 00:31:23,200 --> 00:31:26,120 Speaker 1: changed a great deal, and this was before the COVID 506 00:31:26,200 --> 00:31:31,160 Speaker 1: nineteen crisis. Disney had launched Disney Plus, HBO Max was 507 00:31:31,200 --> 00:31:34,120 Speaker 1: a new service on the way, Several other high profile 508 00:31:34,160 --> 00:31:38,800 Speaker 1: services had either launched or announced an upcoming launch. A 509 00:31:39,000 --> 00:31:43,320 Speaker 1: crowded streaming space was getting even more crowded, with each 510 00:31:43,480 --> 00:31:47,520 Speaker 1: service competing for the entertainment dollars of consumers. The fact 511 00:31:47,520 --> 00:31:51,160 Speaker 1: that Quibi was aiming purely for a smartphone viewing experience, 512 00:31:51,360 --> 00:31:54,479 Speaker 1: rather than a service that was meant for televisions that 513 00:31:54,600 --> 00:31:58,440 Speaker 1: could also be viewed on smartphones was a big differentiator, 514 00:31:58,720 --> 00:32:02,680 Speaker 1: as was the price. In June twenty nineteen, at the 515 00:32:02,840 --> 00:32:07,200 Speaker 1: produced By conference in California, Katzenberg and Whitman announced that 516 00:32:07,320 --> 00:32:11,800 Speaker 1: Quibbi's ADS supported subscription would cost four dollars ninety nine 517 00:32:11,840 --> 00:32:14,600 Speaker 1: cents per month. If you wanted to upgrade to the 518 00:32:14,680 --> 00:32:17,640 Speaker 1: AD free experience, you could pay seven dollars ninety nine 519 00:32:17,680 --> 00:32:21,280 Speaker 1: cents per month. Compared to other streaming services, this is 520 00:32:21,320 --> 00:32:24,680 Speaker 1: on the low side, but not outrageously low. The standard 521 00:32:24,720 --> 00:32:27,440 Speaker 1: package for Netflix is twelve dollars ninety nine cents a month. 522 00:32:28,040 --> 00:32:31,680 Speaker 1: Hulu's basic plan with ADS is five ninety nine per month. 523 00:32:31,960 --> 00:32:35,520 Speaker 1: Without ADS, it's eleven ninety nine. Amazon Prime, if you 524 00:32:35,760 --> 00:32:38,520 Speaker 1: subscribe to it on its own, is eight ninety nine 525 00:32:38,560 --> 00:32:42,880 Speaker 1: per month. Disney Plus is six ninety nine per month. Also, 526 00:32:43,680 --> 00:32:46,040 Speaker 1: apologies for talking about all of this in terms of 527 00:32:46,160 --> 00:32:49,240 Speaker 1: US dollars, but to go through all the variations and 528 00:32:49,280 --> 00:32:53,360 Speaker 1: explain which services are available in various countries would that 529 00:32:53,400 --> 00:32:56,840 Speaker 1: would be a really long and boring discussion, even for 530 00:32:56,960 --> 00:33:01,680 Speaker 1: my show. Quibi continued the march toward launch, paying for 531 00:33:01,760 --> 00:33:05,160 Speaker 1: a content production and negotiating ad deals, and along the 532 00:33:05,200 --> 00:33:09,160 Speaker 1: way some early trouble signs started popping up. A few 533 00:33:09,200 --> 00:33:12,760 Speaker 1: executives began to depart the company. One was a former 534 00:33:12,840 --> 00:33:16,040 Speaker 1: Hulu executive named Tim Connolly, who was the head of 535 00:33:16,080 --> 00:33:20,080 Speaker 1: Partnerships and advertising. He left in August twenty nineteen, and 536 00:33:20,120 --> 00:33:24,040 Speaker 1: the company subsequently eliminated the position he had held. Another 537 00:33:24,200 --> 00:33:27,239 Speaker 1: was jenis Men, formerly of The Hollywood Reporter, who had 538 00:33:27,320 --> 00:33:30,080 Speaker 1: served as the head of Quibi's daily content you know, 539 00:33:30,160 --> 00:33:33,280 Speaker 1: like news and the scuffle bolt was that Men had 540 00:33:33,640 --> 00:33:41,280 Speaker 1: been having conflict with Katzenberg, who was particularly involved with content. 541 00:33:42,160 --> 00:33:45,320 Speaker 1: There were rumblings that Whitman and Katzenburg had a bit 542 00:33:45,360 --> 00:33:48,080 Speaker 1: of beef between each other on occasion, and rumors that 543 00:33:48,120 --> 00:33:51,400 Speaker 1: Whitmen had even threatened to walk away from the business 544 00:33:51,400 --> 00:33:54,280 Speaker 1: if Katzenberg didn't back off a bit. So the implication 545 00:33:54,360 --> 00:33:57,760 Speaker 1: was that Katzenberg was really micromanaging and Witmen felt she 546 00:33:57,880 --> 00:34:00,560 Speaker 1: wasn't being allowed to do her job. I don't know 547 00:34:00,560 --> 00:34:03,160 Speaker 1: how true those rumors are, but whatever the case may be, 548 00:34:03,280 --> 00:34:06,800 Speaker 1: Whitman stuck around. Connolly and Men would not be the 549 00:34:06,840 --> 00:34:09,080 Speaker 1: only executives to leave Quibi, though the next one I'm 550 00:34:09,120 --> 00:34:12,200 Speaker 1: going to mention didn't make tracks until after the service 551 00:34:12,239 --> 00:34:15,200 Speaker 1: actually launched, so I'll get to that in a little bit. 552 00:34:15,360 --> 00:34:18,719 Speaker 1: And I guess that's something. Quibi landed ad deals to 553 00:34:18,760 --> 00:34:21,560 Speaker 1: the tune of a few hundred million dollars leading up 554 00:34:21,600 --> 00:34:24,640 Speaker 1: to the launch, and the advertisers included really big names 555 00:34:24,719 --> 00:34:29,600 Speaker 1: like Google, Walmart, Pepsi Co and more. Whitmen was instrumental 556 00:34:29,840 --> 00:34:32,239 Speaker 1: in making those deals and the ad dollars would be 557 00:34:32,280 --> 00:34:34,960 Speaker 1: there when the service, now scheduled to launch in April 558 00:34:35,040 --> 00:34:38,560 Speaker 1: twenty twenty, would go live, so the stage was set. 559 00:34:38,719 --> 00:34:41,799 Speaker 1: By late twenty nineteen, the company was banking on some 560 00:34:41,920 --> 00:34:45,399 Speaker 1: hunches but didn't have much hard data to support them, 561 00:34:45,840 --> 00:34:49,520 Speaker 1: and the initial idea was to only offer Quibi for smartphones. 562 00:34:49,600 --> 00:34:52,239 Speaker 1: There was no intention to offer a version that would 563 00:34:52,239 --> 00:34:55,759 Speaker 1: play on televisions or computers. And then we get to 564 00:34:55,800 --> 00:35:01,440 Speaker 1: twenty twenty and the COVID nineteen outbreak. I don't have 565 00:35:01,520 --> 00:35:05,439 Speaker 1: to tell any of you how disruptive the outbreak has been, 566 00:35:05,760 --> 00:35:09,399 Speaker 1: particularly in the United States, where we see continuing trend 567 00:35:09,480 --> 00:35:13,319 Speaker 1: of people behaving in irresponsible ways, and I apply that 568 00:35:13,440 --> 00:35:18,640 Speaker 1: label to everyone, from citizens to politicians. COVID nineteen has 569 00:35:18,760 --> 00:35:23,200 Speaker 1: changed just about every aspect of life, and it definitely 570 00:35:23,320 --> 00:35:27,920 Speaker 1: changed how people are accessing entertainment. With more people staying home, 571 00:35:28,400 --> 00:35:31,120 Speaker 1: there was less of a need to access stuff using 572 00:35:31,120 --> 00:35:35,000 Speaker 1: a smartphone. I mean, we've got computers and TVs and 573 00:35:35,080 --> 00:35:38,160 Speaker 1: game consoles and other stuff right there in front of us. 574 00:35:38,760 --> 00:35:41,239 Speaker 1: I think a lot of us use phones because in 575 00:35:41,280 --> 00:35:45,040 Speaker 1: our normal lives, that's the option that's open to us. 576 00:35:45,360 --> 00:35:49,080 Speaker 1: We want stimulation and entertainment. We've got the phones with 577 00:35:49,160 --> 00:35:51,960 Speaker 1: us all the time, So that's the solution to our 578 00:35:52,040 --> 00:35:57,200 Speaker 1: perceived problem. In the olden days, you know, before smartphones, 579 00:35:57,520 --> 00:35:59,440 Speaker 1: we had to wait until we were at some sort 580 00:35:59,480 --> 00:36:03,360 Speaker 1: of connected screen, whether it was television that was connected 581 00:36:03,400 --> 00:36:06,840 Speaker 1: to satellite or a cable or even over the air antenna, 582 00:36:06,960 --> 00:36:10,960 Speaker 1: or a computer connected to the internet. Smartphone entertainment was 583 00:36:11,320 --> 00:36:15,160 Speaker 1: sort of a matter of necessity once it was able 584 00:36:15,200 --> 00:36:20,600 Speaker 1: to support it. Suddenly, Quibi's use case seemed less relevant. 585 00:36:21,040 --> 00:36:24,600 Speaker 1: The nature of the game had changed dramatically and unpredictably, 586 00:36:25,200 --> 00:36:29,960 Speaker 1: leaving Quibi's whole value proposition in question. The service launched 587 00:36:30,120 --> 00:36:33,760 Speaker 1: on April sixth, twenty twenty, and it included a free 588 00:36:34,040 --> 00:36:38,920 Speaker 1: ninety day trial with ads supported service. Not surprisingly, a 589 00:36:38,920 --> 00:36:41,640 Speaker 1: lot of folks downloaded the app when it first launched, 590 00:36:41,680 --> 00:36:44,839 Speaker 1: nearly three million within the first two weeks, but the 591 00:36:44,880 --> 00:36:48,680 Speaker 1: real test was yet to come. For three months, people 592 00:36:48,719 --> 00:36:51,680 Speaker 1: would be able to serf Quibi and check out content. 593 00:36:52,280 --> 00:36:55,040 Speaker 1: Would that be enough to hook them so that they 594 00:36:55,080 --> 00:36:58,359 Speaker 1: would pay for a subscription once the ninety days were up. 595 00:36:58,920 --> 00:37:01,600 Speaker 1: There was definitely no sh shortage of content. There were 596 00:37:01,760 --> 00:37:05,000 Speaker 1: tons of options with big name talent attached to them. 597 00:37:05,360 --> 00:37:08,040 Speaker 1: Some of it was written specifically with Quibi in mind. 598 00:37:08,560 --> 00:37:12,440 Speaker 1: Some were adaptations that tried to work within the confines 599 00:37:12,440 --> 00:37:16,000 Speaker 1: of Quibi as best they could. And that's no small thing. 600 00:37:16,400 --> 00:37:19,520 Speaker 1: Shaping a story so that it fits naturally in ten 601 00:37:19,560 --> 00:37:23,560 Speaker 1: minute chunks requires a lot of work. Heck, I typically 602 00:37:23,640 --> 00:37:26,359 Speaker 1: try and have the three big segments and tech stuff 603 00:37:26,440 --> 00:37:30,840 Speaker 1: last approximately fifteen minutes each. And I never want to 604 00:37:30,840 --> 00:37:32,880 Speaker 1: put an ad break in the middle of a thought 605 00:37:33,040 --> 00:37:36,279 Speaker 1: or concept if I could possibly avoid it, and that 606 00:37:36,280 --> 00:37:38,719 Speaker 1: can be tough. I imagine it's got to be a 607 00:37:38,760 --> 00:37:41,919 Speaker 1: lot harder when you're presenting a long form story over 608 00:37:41,920 --> 00:37:44,920 Speaker 1: the course of a series of short blasts of video. 609 00:37:45,239 --> 00:37:49,560 Speaker 1: Before April was over, another top level executive left the company. 610 00:37:49,600 --> 00:37:52,879 Speaker 1: This time it was Megan Imbras, who was head of 611 00:37:53,000 --> 00:37:57,120 Speaker 1: brand and content marketing. In a departing email, she said 612 00:37:57,120 --> 00:38:01,759 Speaker 1: that post launch was quote opportunity, time to transition end 613 00:38:01,880 --> 00:38:06,040 Speaker 1: quote I imagine, So I bet it's getting pretty darn 614 00:38:06,120 --> 00:38:09,839 Speaker 1: hard to land brand deals right now. The company saw 615 00:38:09,960 --> 00:38:13,960 Speaker 1: the limitations of having the service only available on phones 616 00:38:14,040 --> 00:38:16,040 Speaker 1: was going to be an issue in the stay at 617 00:38:16,080 --> 00:38:19,960 Speaker 1: home world of COVID nineteen, so in May twenty twenty, 618 00:38:20,000 --> 00:38:22,719 Speaker 1: they released a version of Quibi that works on Apple TV, 619 00:38:23,200 --> 00:38:25,879 Speaker 1: and a little bit later they included the ability to 620 00:38:26,080 --> 00:38:29,600 Speaker 1: send Quibi to a chrome Cast device, which allows people 621 00:38:29,600 --> 00:38:33,719 Speaker 1: who have Chrome Cast to play Quibi on televisions. This 622 00:38:33,880 --> 00:38:36,840 Speaker 1: was a quick pivot to try and course correct for 623 00:38:36,880 --> 00:38:41,200 Speaker 1: a world that was drastically different than twenty nineteen, when 624 00:38:41,200 --> 00:38:45,600 Speaker 1: the potential for the service seemed, you know, fairly relevant. 625 00:38:46,000 --> 00:38:49,239 Speaker 1: In June, the Wall Street Journal ran apiece analyzing how 626 00:38:49,320 --> 00:38:52,360 Speaker 1: Quibi was doing. The company had a goal of hitting 627 00:38:52,440 --> 00:38:56,440 Speaker 1: seven point four million subscribers after the first year, so 628 00:38:56,640 --> 00:39:00,360 Speaker 1: by April twenty twenty one. In other words, ording to 629 00:39:00,360 --> 00:39:03,080 Speaker 1: the Wall Street Journal piece it was really on track 630 00:39:03,120 --> 00:39:07,200 Speaker 1: to just hit two million subscribers, and this piece also 631 00:39:07,239 --> 00:39:11,279 Speaker 1: went out before the three month free trial period had expired. 632 00:39:11,880 --> 00:39:16,080 Speaker 1: App downloads had slowed after an initial spike following the launch, 633 00:39:16,440 --> 00:39:19,160 Speaker 1: and the Journal also reported that the company expected it 634 00:39:19,200 --> 00:39:22,399 Speaker 1: would need to raise another two hundred million dollars by 635 00:39:22,480 --> 00:39:24,520 Speaker 1: the second half of twenty twenty one in order to 636 00:39:24,600 --> 00:39:27,680 Speaker 1: keep things going, and that executives were also going to 637 00:39:27,680 --> 00:39:30,640 Speaker 1: take a ten percent pay cut to help lower costs. 638 00:39:31,160 --> 00:39:34,279 Speaker 1: In addition, COVID nineteen has thrown a monkey wrench on 639 00:39:34,520 --> 00:39:38,600 Speaker 1: content production. It's a lot harder and riskier to produce 640 00:39:38,960 --> 00:39:43,920 Speaker 1: Hollywood level television and film programming, and so that fire 641 00:39:44,000 --> 00:39:47,600 Speaker 1: hose of content might be dribbling out before the end 642 00:39:47,600 --> 00:39:51,560 Speaker 1: of twenty twenty. Things are not looking too good for 643 00:39:51,640 --> 00:39:54,840 Speaker 1: Quibi right now. The bet on the service might ultimately 644 00:39:54,880 --> 00:39:59,200 Speaker 1: go south. I actually downloaded Quibi for the purposes of 645 00:39:59,239 --> 00:40:02,120 Speaker 1: this podcast, just to see what it's like to use. 646 00:40:02,640 --> 00:40:06,640 Speaker 1: The feature allowing users to view videos in either portrait 647 00:40:06,760 --> 00:40:10,799 Speaker 1: or landscape is called turnstile. I can confirm that it 648 00:40:10,880 --> 00:40:14,080 Speaker 1: works in that you do get full screen with no 649 00:40:14,200 --> 00:40:17,440 Speaker 1: black bars, no cropping, but if you're watching it in 650 00:40:17,480 --> 00:40:21,560 Speaker 1: portrait mode vertically, then the app cuts off some of 651 00:40:21,560 --> 00:40:25,040 Speaker 1: the stuff that's on either side of the frame. However, 652 00:40:25,239 --> 00:40:28,120 Speaker 1: the idea was that filmmakers would take this into account 653 00:40:28,200 --> 00:40:31,440 Speaker 1: when shooting the content. For Quibi, the process of shooting 654 00:40:31,440 --> 00:40:35,440 Speaker 1: and editing would keep the most relevant stuff in frame 655 00:40:35,800 --> 00:40:38,680 Speaker 1: when you are viewing it in portrait mode, and I 656 00:40:38,680 --> 00:40:43,000 Speaker 1: think that's interesting from a filmmaking perspective. It means cinematographers 657 00:40:43,040 --> 00:40:45,680 Speaker 1: and directors really have to think about the composition of 658 00:40:45,719 --> 00:40:49,880 Speaker 1: their shots, filming them in both landscape and portrait, or 659 00:40:50,320 --> 00:40:53,160 Speaker 1: editors have to make really tough choices when it comes 660 00:40:53,200 --> 00:40:56,480 Speaker 1: to how they frame a sequence so that someone watching 661 00:40:56,560 --> 00:40:59,959 Speaker 1: the program in a vertical orientation isn't going to miss 662 00:41:00,080 --> 00:41:03,239 Speaker 1: out on something critical that's happening within the action of 663 00:41:03,280 --> 00:41:06,799 Speaker 1: the story. I tried watching a couple of things. I 664 00:41:06,920 --> 00:41:10,279 Speaker 1: haven't really found anything that really hooks me, though I 665 00:41:10,400 --> 00:41:12,520 Speaker 1: have yet to watch an episode of Reno nine to 666 00:41:12,560 --> 00:41:15,879 Speaker 1: one one, and I very much enjoyed that show when 667 00:41:15,920 --> 00:41:18,319 Speaker 1: it was on its run on Comedy Central, so I 668 00:41:18,360 --> 00:41:21,080 Speaker 1: will have to check that out. But I think part 669 00:41:21,080 --> 00:41:24,080 Speaker 1: of the issue is that the ten minutes per segment 670 00:41:24,160 --> 00:41:28,239 Speaker 1: thing is a real problem. I think creating very good 671 00:41:28,280 --> 00:41:32,280 Speaker 1: short form stuff that linked together makes a compelling long 672 00:41:32,400 --> 00:41:35,960 Speaker 1: form story is just hard. I think of it kind 673 00:41:36,000 --> 00:41:40,120 Speaker 1: of like the general rule of fiction. The shorter the format, 674 00:41:40,239 --> 00:41:43,320 Speaker 1: the more difficult it is to do well. So writing 675 00:41:43,320 --> 00:41:47,360 Speaker 1: a good novel is hard, writing a good novella is harder. 676 00:41:47,800 --> 00:41:51,120 Speaker 1: Writing a good short story is even harder than that, 677 00:41:51,760 --> 00:41:56,200 Speaker 1: and writing a truly great short poem is extremely difficult. 678 00:41:56,600 --> 00:41:59,360 Speaker 1: I think the same thing is holding true for video content, 679 00:41:59,440 --> 00:42:02,000 Speaker 1: and it's why I've always felt that tech stuff should 680 00:42:02,040 --> 00:42:04,759 Speaker 1: just be as long as the subject requires it to be. 681 00:42:05,440 --> 00:42:09,680 Speaker 1: Will Quibi be able to survive its slow start, I 682 00:42:10,320 --> 00:42:13,400 Speaker 1: don't know. I'm a little doubtful. I mean, it is 683 00:42:13,600 --> 00:42:18,439 Speaker 1: an expensive endeavor. There are reports that advertisers already want 684 00:42:18,480 --> 00:42:22,680 Speaker 1: to renegotiate in light of lower app download rates. I mean, 685 00:42:22,680 --> 00:42:26,440 Speaker 1: why would you pay premiums for impressions you're not getting? 686 00:42:26,960 --> 00:42:30,760 Speaker 1: The content production side is still pretty shaky with COVID 687 00:42:30,840 --> 00:42:35,120 Speaker 1: nineteen going on. The user numbers aren't there yet, and 688 00:42:35,239 --> 00:42:37,360 Speaker 1: now that we're out of the ninety day free trial, 689 00:42:37,560 --> 00:42:40,320 Speaker 1: it's going to be really challenging to win an audience 690 00:42:40,400 --> 00:42:44,200 Speaker 1: large enough to support the business. Gizmodo reported that more 691 00:42:44,280 --> 00:42:47,040 Speaker 1: than ninety percent of users who enrolled in the free 692 00:42:47,080 --> 00:42:50,680 Speaker 1: trial stopped once the trial ended. It may be that 693 00:42:50,800 --> 00:42:54,959 Speaker 1: Quibi is sunk. Some folks think that was inevitable even 694 00:42:55,000 --> 00:42:58,760 Speaker 1: without COVID nineteen. Now I don't know if that's true. 695 00:42:58,880 --> 00:43:01,719 Speaker 1: I do think it was an ambition long shot, but 696 00:43:01,920 --> 00:43:04,600 Speaker 1: I don't know that it was impossible. However, I do 697 00:43:04,640 --> 00:43:08,080 Speaker 1: think the health crisis was an unforseeable obstacle that might 698 00:43:08,200 --> 00:43:10,960 Speaker 1: just be too great for the company to overcome. To 699 00:43:11,080 --> 00:43:14,880 Speaker 1: all the people out there who are working for Quibi, 700 00:43:15,400 --> 00:43:20,279 Speaker 1: my heart goes out to you. For all the writers, actors, directors, 701 00:43:20,360 --> 00:43:24,120 Speaker 1: and crew who are getting work because of Quibi, you know, 702 00:43:24,160 --> 00:43:26,600 Speaker 1: people who had a chance to be part of something new. 703 00:43:26,840 --> 00:43:30,440 Speaker 1: I feel for them too. It is really hard to 704 00:43:30,520 --> 00:43:36,160 Speaker 1: get stuff produced and distributed. It's just really tough. Out 705 00:43:36,160 --> 00:43:39,880 Speaker 1: of every film or TV show you see, there are 706 00:43:40,080 --> 00:43:43,319 Speaker 1: hundreds that never get made. So I hate to see 707 00:43:43,320 --> 00:43:46,319 Speaker 1: any venture like this fold, even if I don't think 708 00:43:46,360 --> 00:43:49,759 Speaker 1: it worked all that well. As for Witmen and Katzenberg, 709 00:43:50,719 --> 00:43:54,440 Speaker 1: they'll be fine. The investors, no, they'll be fine too. 710 00:43:54,480 --> 00:43:58,040 Speaker 1: It'll sting a bit, but let's face it, they're wealthy too. 711 00:43:58,200 --> 00:44:01,279 Speaker 1: They can handle a sour bet that's not going to 712 00:44:01,400 --> 00:44:04,000 Speaker 1: break the bank for them. But for all the people 713 00:44:04,040 --> 00:44:07,440 Speaker 1: who are the rank and file who are working for this, 714 00:44:08,000 --> 00:44:11,799 Speaker 1: that's tough. And I really hope things turn around. I 715 00:44:11,840 --> 00:44:15,000 Speaker 1: think it's a lot to ask for that to happen, 716 00:44:15,200 --> 00:44:18,520 Speaker 1: and it's also a lot to ask consumers. It's getting 717 00:44:19,360 --> 00:44:23,600 Speaker 1: increasingly difficult to convince people. Hey, you know you've got 718 00:44:24,239 --> 00:44:27,880 Speaker 1: four or five subscription services going right now, how about 719 00:44:27,920 --> 00:44:31,920 Speaker 1: you add this one to the list? And Whitman at 720 00:44:31,960 --> 00:44:35,200 Speaker 1: south By Southwest said something interesting. She said that chances 721 00:44:35,239 --> 00:44:40,160 Speaker 1: are we're going to see a pretty big increase in 722 00:44:40,200 --> 00:44:43,080 Speaker 1: the number of streaming services in the short term, and 723 00:44:43,120 --> 00:44:48,160 Speaker 1: then over time audiences will end up gravitating toward probably 724 00:44:48,239 --> 00:44:51,280 Speaker 1: three or four of them, and the others will fade away. 725 00:44:51,800 --> 00:44:53,880 Speaker 1: And the hope was that Quibi would be among that 726 00:44:53,960 --> 00:44:57,920 Speaker 1: three to four. I think that hope is getting more 727 00:44:58,120 --> 00:45:01,720 Speaker 1: and more unlikely as time goes on, but I hope 728 00:45:01,960 --> 00:45:06,120 Speaker 1: that I am wrong. That's it for this episode. It's 729 00:45:06,239 --> 00:45:09,480 Speaker 1: interesting to cover a company that has only really been 730 00:45:09,600 --> 00:45:14,480 Speaker 1: live since April of twenty twenty and is already on 731 00:45:14,680 --> 00:45:19,000 Speaker 1: very shaky ground. It was interesting to dive into the 732 00:45:19,080 --> 00:45:21,560 Speaker 1: history here. If you guys have suggestions for topics I 733 00:45:21,560 --> 00:45:25,040 Speaker 1: should cover in future episodes, whether it's a company, a technology, 734 00:45:25,480 --> 00:45:27,759 Speaker 1: a trend in tech, anything like that, let me know. 735 00:45:28,080 --> 00:45:31,880 Speaker 1: Reach out on Twitter to handle It's tech stuff HSW 736 00:45:32,120 --> 00:45:40,080 Speaker 1: and I'll talk to you again really soon. Tech Stuff 737 00:45:40,160 --> 00:45:44,680 Speaker 1: is an iHeartRadio production. For more podcasts from iHeartRadio, visit 738 00:45:44,719 --> 00:45:48,279 Speaker 1: the iHeartRadio app, Apple Podcasts, or wherever you listen to 739 00:45:48,320 --> 00:45:52,880 Speaker 1: your favorite shows.