Quibi, the short-form video streaming video destination, is in deep trouble. It is lucky to have deep pockets. As subscriptions to Netflix Inc. (NASDAQ: NFLX) and Walt Disney Co.’s (NYSE: DIS) Disney+ soar, Quibi isn’t very popular.
CEO Meg Whitman told the Los Angeles Times that Quibi has pulled back new shows and advertising on its app because of public outcry over the murder of George Floyd. However, the Quibi app is not close to the top list of downloads from the Apple App Store. The app has been downloaded 4.6 million times over the two-month period since it was launched. It is hard to imagine that as time passes it will gain any momentum. It should be assumed that the first wave of promotion of the product would draw a surge in subscribers. This was certainly the case with Disney+, which reached 50 million subscribers within five months of its launch. Some of the Disney increase probably was because people in the COVID-19 lockdown turned to streaming.
A Quibi subscription is not very expensive by industry standards. Per month, the price is $7.99 without advertising and $5.99 with ads. People can try Quibi free for 90 days. Netflix’s “standard price,” which includes HD content, is $12.99 a month. The base price for Disney+ is $6.99. The new HBO Max is priced at $14.99 a month.
Quibi was created to offer short video programs, which can be viewed in under 10 minutes. The idea drew $1.75 billion in investment, an extraordinary number. As Quibi struggles, some of that money is at risk.
The single biggest challenge to Quibi is that the streaming business is crowded. In most cases, people are unwilling to pay for more than three or four services. Netflix takes up a huge portion of the market, with 180 million subscribers worldwide. Amazon.com Inc. (NASDAQ: AMZN) has over 100 million, tied to its Prime offer, which includes other benefits like free delivery of items bought at its website. Apple Inc. (NASDAQ: AAPL) has launched its own service, called Apple TV+. It can target hundreds of millions of people who own Apple devices.
Quibi is late to the market, particularly one so crowded. It has had a poor start, and with so much competition, it is hard to see how it can do better.