Jeffrey Katzenberg’s Quibi Is Ready to Launch, but Will Viewers Bite?

Author

Michael Beach
April 09, 2020

Key details for Quibi:
1) Quibi is short for “quick bites”
2) Launched April 6th
3) Free for 90 days
4) Free for 1-year for certain T-Mobile customers
5) The target audience is 25-35-year-olds
6) $1.75B in capital raised
7) 256 employees

Daily time spent with mobile video (YoY growth) according to eMarketer:
1) 2017 – 35 (↑ 13%)
2) 2018 – 37 (↑ 8%)
3) 2019 – 40 (↑ 7%)
4) 2020P – 42 (↑ 6%)
5) 2021P – 44 (↑ 5%)

Years from initial capital raise to $1B according to Pitchbook:
1) Quibi – 2
2) ByteDance (the owner of TikTok): 5
3) Spotify: 7
4) Hulu: 9

Key details for Quibi content:
1) 50 shows at launch
2) 175 shows are planned
3) 9,500 episodes in the first year
4) 7-10m per episode
5) 25+ episodes added daily
6) $1B already allocated for content
7) $100K/minute average development cost w/ a maximum of $6M/hour

Key details for Quibi revenue model:
1) $5/month w/ ads; $8/month without ads
2) 1 pre-roll ad per episode (<5m video = 10s ad; 5-10m video = 15s ad)
3) 2.5m of advertising per hour
4) 20M subscribers by 2024
5) 75% of users will have ad-supported tier
6) They are seeking $15-25M upfront advertising commitments from companies such as P&G7) $150M+ in upfront ad commitments

Quick math on Quibi advertising:
1) 20M paid users by 2024
2) 50% w/ ads
3) 15M paid users w/ ads
4) 2.5M of advertising per hour
5) $35 CPM for 15s ad
6) 10 15s spots/hour
7) $0.40 in ad revenue/hour
8) $665M revenue from advertising
9) $44.33/user/year in ad revenue
10) $3.69/user/month in ad revenue
11) 127 hours/year of viewing w/ ads/user
12) 11 hours/month of viewing w/ ads/user

What will ads look like?  Sara Fischer at Axios has you covered!

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