what's Quibi?, Disneys new business, and a rare tech partnership.
Issue #2 - Quibi, Disney+, and Google x Apple.
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Not enough content for you on YouTube? Netflix series too long? Well now there’s a solution - Quibi. Launched last week on 6th April Quibi is a short form streaming service designed exclusively to be used on mobile, its name is a combination of ‘quick’ and ‘bites’. Shows and films are split in to small chapters, each less than 10 minutes long, with many adding up to multiple hours across a season.
The content style is currently being split in to 3 main types: scripted titles similar to full-length films but as above split in to small chapters, unscripted titles like reality shows again being split in to chapters, and finally ‘daily essentials’ such as news and entertainment shows each being in this Quibi short form.
The service has some pretty big name backers including Disney, Warner Bros, NBC Universal, and the BBC. It plans to spend just over $1 billion on content in its first year and for context Netflix spent around $15 billion in 2019 on content so it’s actually not a crazy amount of money. For this $1 billion it will put out about 7,000 pieces of content which I assume means 7,000 of it’s 10 minute pieces, so in reality not a huge amount. They have managed to get some big names involved such as Idris Elba, Liam Hemsworth, Jennifer Lopez, TMZ, E! and the BBC all producing content.
A subscription to Quibi costs $5 per month and you’ll still see ads but for $8 you can get the ad-free version. In the UK, and I’ve done this, you can sign-up for a 90 day free trial after which there’s a £7.99 monthly subscription which I assume is the ad-free version.
Having played around with Quibi a little bit it’s actually really interesting. There’s a very subtle but hugely impactful differentiator from other similar services like Netflix or YouTube and it’s something they’re calling ‘turnstyle’ mode. This is a feature which seamlessly shifts the video from landscape to portrait while maintaining full screen. Normally content is filmed in landscape and watching on mobile requires you to turn the device to landscape, here though you can keep it portrait and it’s still full screen without really losing any of the content. This is really hard to explain in words but it’s really brilliant, try it out.
It feels like Quibi really knows its target audience too. They are most likely those 18-40ish, used to watching short form content on their phones from YouTube, Instagram and Snapchat. In fact the founder says “We are not kids, we are not family,” and “Our bull’s-eye is a 25-to-35-year-old, multicultural, diverse millennial audience.”
Overall I think this is a brilliant service, although a little expensive for the relatively limited content compared to other established players. They seem to have the style of content spot on and are clearly starting this from scratch in terms of technology, they’re not just going with a standard content player, this feels very different. With its big name backers and nearly $2 billion from investors I’m sure they’re going to make it a success. What they really need now is a viral show that gets everyone talking and subscribing, kind of like how Breaking Bad became the hit show that people signed up to Netflix to watch.
Sticking with the streaming service theme. Disney revealed that is now has 50 million subscribers worldwide. Putting that in to perspective Netflix has somewhere around 160 million, so not too bad for a service which is only 5 months old. I imagine that Disney saw a major uptick once global lockdowns started coming in to effect.
Most astonishing with this figure though is that at around £60/year this gives Disney £3 billion of additional yearly revenue, entirely from their existing content, much of which is decades old. Obviously this figure doesn’t account for currency differences and different pricing in different regions but it’s amazing that a company can now create billions in new revenue just by making all of their content available on demand. This is also recurring revenue, and largely guaranteed every year as customers will likely be very sticky on this service.
I have no doubt that this, combined with the global lockdown will be a significant step towards studios skipping the cinema and putting content straight to the consumers home. This could signify the end of the cinema, and certainly is the end of DVDs and other physical media. Other streaming services should also be a bit worried by the success of Disney+. With Disney and other creators keeping their own content for their own services it will no doubt be increasingly difficult for the likes of Netflix to obtain content, unless they make it themselves.
Businesses in every sector should be also be looking at the success of Disney+ and seeing how they themselves can develop a recurring revenue model, particularly where they have large amounts of existing content. Content could be videos, pictures, reports, anything really that adds value to someone’s work or personal life.
Apple x Google
In a very rare move Apple and Google announced that they are partnering to create a platform supporting contact tracing during the Coronavirus pandemic, and probably beyond.
While they’re not creating a single app for this, they are creating a coherent set of technologies and processes to enable any local apps to work across both iOS and Android.
They’re developing this in two phases. The first is to release an API which will allow interoperability between iOS and Android for contact tracing apps developed by local authorities. This will be released in May. The second phase is to develop bluetooth based technology, enabled within the operating system itself.
This will work by each persons device having a unique ID which changes daily. When two devices come in to close contact, measured by bluetooth, they will exchange and store their unique IDs. Then, if someone is confirmed as having Coronavirus they can alert every device they’ve come in to close contact with over the last say 2 or 3 weeks.
Obviously there’s some potentially significant privacy issues with a platform like this but it seems that Apple and Google have been very careful to develop something which is designed with privacy at heart. Randomised IDs changing daily will significantly reduce any potential for surveillance, neither Google nor Apple are running any contact tracing app themselves it’s all done by the local authorities, and it doesn’t use location data as they don’t care where people have been just that they’ve been in contact.
In the UK the government have announced that the NHS are developing an app to make use of this approach and similar apps are in development elsewhere by governments and health authorities.
This is a really positive thing to come from Apple and Google and on the privacy front it’s been executed extremely well, so long as local authorities now make their apps and databases equally as secure and privacy focussed. However, I unfortunately don’t expect to see this kind of partnership to become the norm for these two companies.