Listen: Quibi spending more than a billion wading into streaming wars. Luring subscribers will be key.
"QUBE was founded by former Disney Disney executive producer. Jeffrey Katzenberg Meg. Whitman is CEO. They gave a big presentation about the service last week at sea. Yes in yes Las Vegas. They've raised more than a billion dollars and signed up a lot of big name. Talent to create all new shows and movies but no video will be longer than ten minutes. At a time. I spoke to what minutes and she told me queries. Secret sauce is all new technology. I asked her to tell me how it works. Well the first thing is you know. People people are watching a video on on their mobile phone today but it's an uneven experience. Sometimes if you're holding the phone portrait it's a little postage stamp size than u-turn horizontally. It's got big black line. Some content is only available. Portrait sums only available in landscaping said for our use case on the go. Viewing we have to be able to have seamless portrait to landscape rotation with full screen video. And we figured out that it had to really be what we call script to screen innovation because the creators have to film a little bit differently. They have have to look at a shot and they have to say how will that shot looking portrait. How look landscape and then we make two edits of the movie? You Could Watch the movie and portrait or the whole movie and landscape but the gyroscope interscope in your phone knows which way you're holding the phone so we can show you the right editor of the movie and so we thought all right. We'll have the edit of the portrait the editor the landscape and we were going to run both in the background on your phone except for them. We figured out it would eat way too much bandwith and way too much battery life Susan. Okay got any other ideas us on how we can do this. And ultimately it came down to a kind of compression technology that when you are watching in portrait your landscape version is compressed and this is never been done before we have patents on it and that's why the experience is so seemless an so engrossing and then we shot obviously to the aspect ratio of the phone. Is there price pressure. Now I feel like Disney is putting a lot of pressure on a lot of services and you're launching at five dollars a month with ads eight dollars a month without. Yeah I'M GONNA have to come down. I don't know you know it's four ninety nine a month with ads seven ninety nine a month without ads we think that You know member we're going after millennial audience you know eighteen to forty four. We think that most will pick the ad-supported version because it's very light add load. It's only a two and a half minutes per hour of watching which is much less than prime time. TV which is seventeen and a half minutes of advertising for every hour that you watch and so for ninety nine we think is a good value for this premium content on their mobile phone and for those people who really don't want advertising. We felt like we should offer an ad free version Russian at seven ninety nine. Yeah so then. D expect that most of the revenue will be generated by the subscription We think that that will be obviously the base case. And we'll see how this works out. I think the majority will be subscription revenue But we'll see what made you sort of land on this idea of ten minutes for a long time in video radio. It was two minutes and then Youtube went to ten minutes for mid roll purposes. Is it for mid roll purposes. Like how did you sort of land on the part of this judgment but at the data that we used is it turns out that the average session length for the population worldwide except for China is actually six minutes so think about it to be spent five hours hours a day on your phone. You're picking up that phone a lot of different times and the average session six minutes. It's a little bit longer in China. So he said six minutes. So you know maybe our goodies. Abe's we call our content. Qubit should be between five and a maximum of ten. Can I watch on TV. You at launch. He will be able to chrome cast like you'll built casts is to your TV but we at launch will not have a unique apple TV or chrome. Google TV APP PER SE. Because really we think this is mobile. Only and when you think back to this portrait to landscape seamless full screen video. Think about it part of the joy of this. Is You get on the bus holding your phone portrait. Then you watch you know On the bus and horizontal then get off and you go back to portrait most people's. TV's are not going to go back and forth and So we think this is sort of an interesting thing new way to view and is uniquely suited to the mobile phone and then what about the content race. I mean that can be you know. I've been in content longtime. Yes it can be a little bit of money pit. Yes and you know and there's no built in library necessarily archive that you're working from. How do you win that battle? Yeah well you're right. There is no we will be the first streaming services that launches without a library. Because think about it. You can't take sixty minute television show and just chop it up into You know six ten minutes segments is all has to be shot for turnstile which is new and has to be written if it's a movie and chapters that has to be written in a chapter optimized version so it's all new which we think is actually exciting and fun but we have to make a lot of content. Because you can't come to see two or three things you have to field there's a world of richness and a lot of genres and you know we have quite a unique content strategy and so we have Maybe invested did significantly in content. And this is all about finding the great stories Attaching the great actors and actresses to it and getting them excited sighted about doing something entirely new so we will launch with In the first year. One hundred and seventy-five original shows every day we will will produce commission from our partners Three hours of new fresh content every single day which is thirty five five percent more than a network does in prime time so there's a lot of fresh daily new content on the on the APP which I think will keep people. We'll keep coming back for that. At least that's what we hope I mean I am listening to this as a person who does the daily show. And I'm thinking either your geniuses or you're crazy well here's the thing remember. We don't make any content ourselves. You make your own content for that I do. We have to pay for it. But we are leveraging leveraging the expertise of our craters studios were leveraging for our daily essentials where we curate news and sports and weather and lifestyle. We're we're leveraging the infrastructure of our excellent partners right and And so that makes a bit easier but but we have a budget. And we've we've planned for that and and you know we think that will Be The budget for the first year. Talk to me a little bit about the content. So do you anticipate that people will make short versions of things that they may be. Five years later turned into. Oh a longer project longer project. Let me give you an analogy in another medium that you will totally get Do you remember the Davinci Code. Yep The DAVINCI code is four hundred sixty four pages just one hundred and five chapters. Every chapter in the Davinci code is five pages because eighteen years ago. Dan Brown said people are not reading for forty five minutes now. They're probably not even reading for thirty and he said if you've got five minutes I want you to read one chapter got ten minutes. I want you to read two chapters but the thing I do not want you to do is stop in the middle of a chapter but nothing was lesser about the Davinci code other the length of its chapter so we like to say our movies. Nothing's lesser about the movies other than the chapter is the way we deliver them and then we have You know as I described our daily the essentials which we hope will create the daily consumption habit. We're going to curate. You know. Twenty five daily shows every single day From talk shows to horoscope go to news to whether to sports excetera and then The other kind of content we have is this unscripted episodic and documentary three shows and a perfect example. There is Chrissy. Teigen is doing a show her favourite show as it turns out of judge. Judy so she came to us and said I want to do Christie's Court and the tagline is no claim is too small and dumb and each claim will be ten minutes or eight minutes and And she's super excited about it and you by the way you can. You can't in our movies you've got to watch them. The episodes in particular order. But Christie's court you could watch in any order because they're not related to each other episodic so you really have like snack bowl and binge. Yes kind of covered exactly. Yeah okay why are you here. Yeah I mean considering your background ground what drew you to this. Yeah well I've been friends with Jeffrey. For thirty years. We worked at the Walt Disney Company together back in the day and then When I was at Ebay I sat sat on his DreamWorks Animation Board? So Jeffrey and I've been friends for a long time. And when he heard I was stepping down from HP after six and a half years. I told the board I would say five years. He called me and he said would you ever consider coming down and being the CEO of Qube. I said well I don't know I've gotta you know so. He came up and had dinner and at the end of dinner. Three hour dinner. I said this is a really good idea. It's a really good idea because what I look for in new consumer tech businesses. Is I look for other trends right. Trends are absolutely right is the market large. The market's gigantic back. And is there you know. Are you changing consumer behavior or are you just taking people to a premium level and is there a sustainable ainable what I call a sustainable competitive advantage. Meaning if we're successful and everyone else comes in how. How do we continue to win? And how how is that is that through the intellectual property. Well there's actually Largely through our relationships with our studios It is first mover advantage for sure and we have to learn how to how to create create this platform. And we've had to teach craters how to do it so we think we have A lot of barriers to entry because we will be out first by a pretty wide margin"