The Quibi Question: Will Consumers Pay for Premium Short Form?

While the imminent launch of HBO Max and Peacock get more attention, early 2020 will also bring us Quibi’s premium short-form service. Many are skeptical that Millennials (or anyone else) will pay to watch high quality content on their phones. But here are three reasons not to write off the idea too quickly.

1. Premium short form content has worked before. In 2001, BMW released “The Hire” — a branded content series that consisted of eight 10-minute films. They featured a legitimate movie star (Clive Owen), and famous directors like John Frankenheimer and Guy Ritchie. They weren’t convenient: you had to get a point of sale DVD or download them from BMW’s site (which took several hours in the days of dial-up.) But they were still hugely popular: the DVDs quickly ran out, and Guy Ritchie’s movie (“The Star”) still holds an 82% on Rotten Tomatoes.

2. Target users (young people who watch video on their phones) are interested. Each December, Hub Research fields a study called “Video: Redefined” to measure interest and consumption of non-traditional forms of video entertainment. The 2019 study included a description of Quibi’s product, content, and price.

• After reading the description, one-third (34%) of all respondents 13-74 were at least somewhat interested in the idea.  
• But among consumers age 13-24, interest was about twice as high (63%).
• And young consumers who regularly watch video on their phones were even more interested (75%).

3. Big advertisers are buying in. In October, Quibi announced it had sold out its entire first year of ad inventory ($150 million) to companies like General Mills, Taco Bell, Walmart, and Google.  This isn’t a big number by traditional TV standards, but it suggests that big brands see potential.

This isn’t to say that Quibi won’t have some challenges to overcome.

For one, awareness: Only 14% of respondents had heard of Quibi before taking our survey. Another is the mobile-only distribution: Even among young consumers, about half were less interested when told about that restriction. But Quibi has one thing increasingly rare in the crowded streaming marketplace: a differentiated product. And for young people consuming lots of non-premium YouTube content on their phones, that might be enough to justify giving it a try.