Quibi Spent $63 Million On Ads In Short Six-Month Life

Raising $1.75 billion wasn’t enough to make Quibi a success. Nor was a massive spend on advertising.

The short-form video startup had a short six-month lifespan during which it spent at least $63 million on TV, web, and print ads, according to ad intelligence firm MediaRadar. While that’s a significant amount of money on marketing, it’s only good for fifth place in the streaming video category behind four other players: Amazon Prime, Disney+, Hulu, and Peacock.

According to MediaRadar, that $63 million includes major spending on a Super Bowl ad, plus big launch spending in March and April.

Founders Jeffrey Katzenberg and Meg Whitman blame Covid-19 for at least part of Quibi’s problems in an open letter to employees and partners, but MediaRadar CEO Todd Krizelman attributes Quibi’s failure to competition.

“Many feel the timing was off, launching at the start of a pandemic,” says Krizelman. “But, this narrative doesn’t entirely fit. Due to COVID-induced lockdowns in April, commute times were eliminated, people had more disposable time than ever to sample new services, like Quibi. We also learned that people were willing to pay for video content. For example, Disney+ subscriptions surged much faster than expected. What was, and is a real constraint is the degree of competition. It’s more severe than ever. Disney+, Apple TV+, HBO Max and the introduction of Peacock around the same time made it hard to break through the noise.”

Other challenges for consumers’ time include TikTok, Snapchat, YouTube, and Triller, says Krizelman.

Media analyst, former journalist, and now VC Josh Constine, however, blames Quibi’s content and technology platform. Constine followed the startup from inception, and finds four key issues:

1. Old-school Hollywood approach: not mobile-native creators
2. No sharing capability (no screenshots) so limited virality
3. Slow content and weak discovery
4. No social or second-screen features

My personal take: short-form video is great on your phone, but “short” means short: 10-60 seconds like TikTok. Longer-form video is for relaxing, and works better on larger screens. And having to wait for episodes is … very 1980s.

Plus yes: the competition is extreme right now in streaming media and short-form video.

“We created a new form of mobile-first premium storytelling,” Katzenberg and Whitman say. “And yet, Quibi is not succeeding. Likely for one of two reasons: because the idea itself wasn’t strong enough to justify a standalone streaming service or because of our timing.”

Apparently there is some cash left. The founders say they’re returning it to investors.