Jeffrey Katzenberg and Meg Whitman used an onstage appearance before hundreds of TV and film producers this weekend to lay out more specific numbers behind Quibi, their next-gen take on short-form online video.
The latest numbers answer some questions for the app-based mobile video platform. But even by answering all those questions, Katzenberg and Whitman left a big one in place: will all this add up to a paradigm-shifting hit, or a very expensive whiff? Here are the big new numbers:
- 7,000. The number of episodes of content Quibi will create in its first year.
- April 6, 2020. That’s the platform’s launch date, when it will debut with eight “lighthouse” series and lots of other content.
- “25 or 26.” How many additional episodes Quibi will roll out daily after that big launch.
- $100,000. The per-minute cost of programming on Quibi. Partners are paid production costs plus 20 percent, up to $6 million per hour. That price far eclipses typical production costs on YouTube and other social-media platforms. On the other hand, Katzenberg and Whitman took pains to say Quibi won’t be anything like YouTube.
- 2 or 7. The time frame in years when content reverts from Quibi to its partners. Antoine Fuqua (Training Day), for instance, is finishing #Freerayshawn, a $15-million production that will be cut into both a 2.5-hour feature and 15 episodic “chapters” for release on Quibi. After two years, Fuqua can take the feature-length version and shop it anywhere he wants. After seven years, the episodic version reverts to Fuqua as well.
- $4.99 or $7.99. Monthly prices for the ad-supported subscription and ad-free versions of the service. This simple tiered approach, a la Hulu, increasingly looks like a middle way for services that can’t count on Netflix’s first-mover advantage or Disney+’s sheer Disney-ness.
- 6, 10, or 15. The length in seconds for the single ad attached to each episode. Ad length depends on the length of the video segment it precedes. One nifty idea that advertisers greeted warmly: progressive ads, telling a one-minute story in 10 six-second bursts across the reach of a specific series.
- 2.5. Total minutes in hourly ad load. Far less, Katzenberg said, than traditional networks or even AVOD services.
- $500 million. Likely amount of additional capital the company will raise before April 6.
- $470 million. The planned cost of a massive marketing campaign so people can learn to pronounce “Quibi.” Kidding. Kinda. Given the intrigued but clueless comments of some insiders at the Produced By conference, they still have a lot of explaining to do.
Of all the new numbers, those last two are the most eye-popping. Before the company has socked away even a single dollar from subscribers or advertisers, it will have to pay off somewhere around $1.5 billion in investments. That’s a Very Big Nut to crack.
Quibi also will have to roll out a huge, existentially important and highly complicated cross-platform marketing campaign. In terms of sheer scale, it dwarfs anything you typically might see in Hollywood by a factor of two to three times. And it will be vital to get people to try and buy and stay on the service long enough for it to start bringing money in.
Whitman and Katzenberg explicitly denied recent reports they would raise a second $1 billion, but also made it clear they’ll need more money before their platform reaches the public.
“We’ve just raised $1 billion,” said Whitman, Quibi’s CEO and a former head of eBay and HP. “But we will go out to the market, in the fall or next spring. We don’t need the money right now, but we will need more to get to break even.”
“It’s not (going to be) a billion dollars, it’ll probably be half,” said Katzenberg, former CEO of DreamWorks Animation. “In the first year, we will spend $1 billion on content. That’s what we’re out there aggressively doing, but (we will spend it) also on the marketing of the platform as well as the content.”
On launch day, the service will be available only in the United States and Canada, and only through mobile apps.
That pair of decisions clarifies what Quibi is and hugely simplifies what it must do technically. The next challenge will be making a whole bunch of episodes by April 6.
“Our view is we have to launch with a lot of this new form of content,” Whitman said. “You can’t go to Quibi on Day One and see 2.4 shows.”
The pair have been making frequent speeches and appearances at entertainment and tech conferences, trying to attract partners and investors, and build awareness of the project. Their Saturday appearance was particularly strategic, at a conference on the Warner Bros. studio lot, hosted by the Producers Guild of America, that annually draws around 1,000 Hollywood producers and industry types.
Part of what makes Quibi “a new type of content,” Katzenberg said, is the way the company is rethinking how people create and consume mobile video. The app-based approach will let them improve that often-mediocre viewing experience for users in a number of ways, he promised.
Quibi projects also will feature lots of big Hollywood names in front of and behind the camera, collecting substantial checks for their work, plus the opportunity to resell the project elsewhere after a few years.
Those names include Oscar winner Steven Soderbergh, one of Hollywood’s supreme technology adventurists (he shot High Flying Bird, his last Netflix film, solely on older-model iPhones). Soderbergh and producing partner Michael Suger had just agreed to create a series for Quibi, Katzenberg said, while providing few details.
“He said, ‘All right, that’s a new type of content,'” Katzenberg said.