Quibi: Why the $2billion video app is failing
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The audience has not turned off and that's not all. Today what happened equity and why? This is number. Joining me now as Catherine Van Erin Donc shows staff writer for New York magazine and Vulture Dot Com. Catherine Hello, thanks for joining us. Thanks so much for having me. I want to start with the name Qube. It's sort for quick bites. How does that stack up out of that name? Stack up against other names like Netflix's and Snapchat Tiktok Hulu like what's in a name. You know every company has a has a Goofy name that was unfamiliar to us, and we accept that my my issue with Qube and I think. One of the things that that I I probably shouldn't judge it on, but I can't get out of my head. Is that what it was Qube? I was like okay. It's another one of these names. It doesn't mean anything to me, but I. Maybe it will just become one of those words that in five years sounds completely normal. Except then they explained that it was quick vice. Is that what it stands for? Quick by. After you can watch on your phone with tons of awesome original shows, and then as soon as I knew, there was an explanation for this silly word, it just felt like this wildly over engineered thing, and I couldn't get out like to me. It just immediately sounded like it was a kiosk in an airport where you're going to buy very underwhelming sandwich, you know. And I've never been able to move on. Well I understand that the original name was actually supposed to be something completely different, and maybe not any better. No so there was a wall, Street Journal report that came out recently that is about the relationship between Kubis founders and one of the details in that was that it was originally going to be called Mukasey the like small Sushi meal for people who can afford to have really lovely small bite Sushi meals and. I felt. That name is so much worse, but also somehow like true or to what they were imagining. This would be I everything I learned about quickly. I, just I am amazed new. Well I WANNA. Ask You about what could be is supposed to be. What actually is the problem that Quimby is trying to solve? Yes so there are these chunks of time throughout the day where we are watching video on our phones we tend to be watching it in the context of like stuff that we scroll across on social media on your twitter. Feed on your facebook. And almost everyone watches video on their phone in a vertical format. And you just have huge black bars above and below the video that you're watching and. Very little of what you're watching is actually made to play on the phone so. Quad's idea was what if we actually made an APP that was designed to create video that was four. Your phone and everyone who is making all of that video knew that that would be the context that people were going to be watching it, so you can watch it in vertical. They also made it so that you could watch it in in horizontal, and you could switch back and forth the videos are meant to be short so that if you're watching it, say while you're commuting or if you are sort of inbetween meetings if you're waiting for an uber these little moments in time throughout your day when everyone's fiddling with their phones already, what if you had bespoke video to fill in those little moments uniform full screen images like you've never seen before from world renowned creators. With perspective on all two story. On the small screen so that was really the the. Initial conception of Qube and they then got this huge stable of entertainers to create content for that platform from Academy Award winner. Pete fairly comes to comedy starring Dave Franco and Bill Murray Kiefer Sutherland and Boyd Holbrook, starring in the fugitive brand new take, and so when they launched, there was this sense of like. Okay! This could be a completely different. Way To watch video. They could be inventing something interesting and do here. and I think that was the hope. is the brainchild of these two veteran executives. You have Jeffrey Katzenberg and MEG. Whitman and Kassenberg course is known for his role at Disney produced. Animated Films Like the Little Mermaid and Aladdin and it's not dissimilar to what HBO did in the Nineteen Nineties when they came along and said. We're not TV were HBO. We're not short-form. We're quitting and you have meg Whitman who was a former head of Ebay and Hewlett Packard. I had this little mental model of Great. Consumer, tech businesses I is are the Trans the wind at your back or the trends rights. Friends are dead on here. What did that signal to? You think to investors. About the potential of this APP. They were very successful in signaling. How confident they were in this idea and I think the the two of them together felt like this perfect lineup of the exact kinds of people that could make something like this. You want somebody with entertainment experience. Somebody. Is Who knows the business and who has a sense of what people actually WanNa be watching, and then you also have somebody with the experience of launching a new Tech Company and getting people to change their behaviors around the technology that they're using and understanding. What's going to be appealing to investors and how to make you I work in an all of the? Technical stuff that is crucial if an APP like this is actually going to be appealing for a lot of people and they were able to raise. An incredible amount of money I mean I. Think almost like one one point eight billion dollars. Yes yes, which. I, it's hard to imagine. How exactly all of that money? Got Spent, as quickly as it did, but the reporting at least in the Wall Street Journal. In some other places is that they have been burning through cash very very rapidly and they will be out of that original one point eight billion by the like by this fall, and if they want to continue through next summer, they are going to have to fundraise again. We'll presumably one of the ways they have been spending. Those cash is pulling in these major stars I. mean the list is remarkable Jennifer Lopez Lebron James Alba Steven Spielberg Chrissy Teigen I mean it goes on and on in terms of these kind of a-list celebrities. They've brought in to create and produce content for the APP. Celebrities will each be giving away. One Thousand Dollars I didn't know how to create school, but let's figure it out. Let's learn the people are. The cases are real, and the judgments are legally binding this is. Absolutely and they also are doing a lot of have made a lot of deals with pre existing. Particularly, when for their like newsy shows, preexisting titles, so they have like sixty minutes show stories that risk questions about our society but race power. We're going to take you there, so you can be part of got experience. There are also licensing agreements that they must be spending quite a a lot of money on between those and the fact that they had to sort of make all of this. This content from scratch because they wanted to launch with a with a significant library of stuff Yes, that is that is where a lot of the money has gone, but they also have are a huge company. They have even still even after executives have have started slowly leaving. They still have about two hundred and fifty employees, so it's A. It's a significant outlay of cash for them. Was I wanna ask you about the actual roll out of. I think one of the decisions that that skeptics have an critics have keyed in on was that the content is only available on the. APP on your phone so you can't initially. You haven't been able to cast it onto a television. You can't take a screen shot of it I mean you can't really share it. What what kind of impact does that had? I in terms of the success of the rollout. It is incredibly annoying and I think it has been a bigger element in Quebec underwhelming performance. Then qube itself might have imagined particularly because a lot of the content is. Not that great, and some of the most interesting stuff is also the goofiest, and I am very aware of how powerful it is to have somebody say like. Have you seen this ridiculous thing like that is a great way to get people interested in this this thing that you are trying to advertise. And there was in fact, this one clip of equality show that did go semi viral. It was a clip from a horror show by SAM. Again big name. Called Fifty states of fright and Rachel Brosnahan and the premise is that her arm gets cut off, and her husband makes her a golden arm of command that is. His. As long as your body absorbing the gold through your skin. Very, liken do. You've got to take off that prosthetic now, and it is so silly an over the top and stilted and everything about it feels incredibly awkward, and there was a clip that somebody took using one phone to record the different phone playing this episode of Rachel Brosnahan Saying I. If I die. Bury me with my goal norm great. And people shooting the video or Giggling, Frequently in the background, yes, great viral stupid content could have been a pretty good driver for them, because I know a lot of people like to watch a a train wreck right, and then maybe if they come for the train wreck, they stay for other stuff that may actually be more interesting to them or or that. They would actually like if you can't share screen shots if you can't make. Make this a thing that people are talking about with each other. You're never going to be able to build that kind of audience. appreciation for these sorts of things, because also when people like things, they like to make more content about it. That's what you want and so qube really by by making that something. That was very hard to do. I think that was an unexpected problem for them. You know I downloaded. The APP took a look at it and I was impressed. It looks really slick, and obviously there's a whole range of content there things like the golden arm, but there's also a a show called sixty and six, which features US Pulitzer Prize, winning correspondent Wesley Lowery. and. It looks really good I I the the content was impressive among the first people we came across at the memorial. Was Tyrone Carter former NFL? Player for the Minnesota Vikings response to hurt. Because Minnesota got ugly truth. I need to let you know about your book. There are some things on Qube that I I'm comp- I'm completely sold by that is one of them I am actually oddly fond of a very strange comedy. Show called. Nikki, fresh. Starring Nicole Richie and looking for music that only I can make. This contract. where she plays a sort of half parity version of herself as a trap artist, who is making music for like hipster Moms who like organic foods and then? For you strange music for Everybody Teachers Rabbis Burgos. And Gays and Lionel Ritchie's shows up and calls her ridiculous. I mean this is the thing that I would love to be able to. You know you could imagine a conversation about. I have to say though in almost every one of these cases. As you watch these shows, even the good ones. You can feel the ghost of what they want to be. Still while you were watching them in reduced qube for like nothing about. Well nothing on being on nothing about being. On this. Platform. Improves them sometimes there are. The news stuff tends to translate a little bit better. Because it is meant to be more about the news of the day, and so the fact that it feels kind of ephemeral is is all right because it is today's news, but the fictional shows you don't want them to feel ephemeral. You don't want them to feel like this little light trivial thing you want people to like them and care about them, and maybe come back to them and share them and think about them, but they always they are the fact that they are so short and that the the the. You can't talk about them with anyone else. Gives them this odd airless nece. Watch it and then it's just. You can't even remember the experience of watching it like Oh. Right I I. Did actually spend quite a bit of time watching. Nicky fresh, but. I but I never talked about it with anyone again. I can't take any screen shots of it. And it was in these tiny little chunks that it was like it was making fun of itself for how short it was, so it's sort of doesn't stick in your head at all right. When I commuted once upon a time before the the pandemic would see people watching like segmented versions of of late night, television or news bites, or you know funny videos or not. It was rare that I was to see someone watching net flicks on on a subway I. Think the content that they were making. It almost didn't matter how good it was. It was always going to be completely useless in the way that people actually use their phones but I also think the content. If you're if you're aiming for a group of people who are on their phones all the time, and who maybe don't want to be watching Netflix. Probably should be aiming for more like a Gen Z. younger millennial audience, and the content that they're making some of it is for that, but a lot of it is much more for like I'm thirty five, clearly, the shows that they are making r with a user like me or even older in mind and Rick. I just doubt that that was ever going to be a group that was suddenly going to be thrilled about only watching videos on their phone. He smashed pretty much. Every billboard and streaming record that matters it has already been stream more than a billion times. People still to this day point to this is the moment everything changed, but whether you agree with those claims they're not. This podcast isn't really about him. either. You're not an astute businessman, or you're inherently racist. When it comes to black music in this country, this is not a drake podcast available now on, CBC listen or wherever you get your podcasts. I'm Dr Hillary McBride. Let me. Take your microphones rarely go. My therapy office. It's where my clients hurt. He'll and ultimately thrive. You're going to hear private conversations that we rarely ever have with ourselves. Let alone share with others. Welcome to other people's problems. Maybe along the way you'll discover that other people's problems are a lot like your own. Season Three's out now. Subscribe on CBC Listen Or Wherever you get your podcasts? I WanNa, ask you about the launch. It costs five dollars a month to be a subscriber to qube and that's five dollars a month with ads eight dollars without ads. They've been running a fourteen day free trial. How have subscriptions gone. Not Great really not, great. Metrics hit me. Was the metrics whether we got? How many people have downloaded so far? More than three million, and certainly in a couple of weeks period of time to to do that is pretty pretty phenomenal. Current pace is fewer than two million paying subscribers in its first year, which is paltry, although keep in mind, you're the target. The Caribbean set was seven million when it was first launched. It was right when most of North America was. Starting to grapple with corona virus, and so suddenly, the nobody is actually leaving their houses. Nobody is doing this kind of commuting behavior that could be was designed to be watched during and so Katzenberg and Whitman had there are some quotes that were floating around where it was like well part of the problem with these launches that. Pandemic and we could not have foreseen this coming and so. Part of the reason nobody's watching. It is that it was designed for behavior. That doesn't exist anymore. was there ever a point when you guys second-guessed yourselves about the lawyer Light Grazie I can kind of understand that except in this most recent report. said was that they are continuing to having problems problems with subscriptions, not because of Corona virus, but because of the sudden wave of global protests for black lives matter, and after the death of George Floyd they feel uncomfortable. Promoting could be so. That's actually why they have a subscription problems. In an interview with New York Times initially Katzenberg said I attribute everything that has gone wrong to the corona virus everything. Everything meanwhile now the problem is is black lives, matter and some point you have to wonder. Could Qube have only been successful in their minds if nothing in the world was happening? So what are you going to be looking for next with Qube? What what do you anticipate will be their next move? Look I. at this point, it does feel pretty hard to turn the ship around. But I don't think it's impossible yet. they raised one point eight billion dollars, so even though they have spent a ton of it, they still have money left in the bank. They could do two things they could hang on long enough based on the fact that they actually have new content still coming out when a lot of TV and movies do not. And then. After that, they could add some kind of like sharable social element to the APP. They could enable screen shotting which I think. They is going to be difficult. Because it's a, it's a for them. It's copyright licensing problem, but if for them I would, I would I would tell them that it is a priority I would also look. They got all of these big entertainment names to sign on to make a kind of thing. The didn't really exist yet. Like the idea of what a qube show is with something. Everyone was just trying to imagine without having any models, and so it is possible that you could now go in as a as a creative. You know some a director. A producer watch a lot of could be. Be Stuff and say oh. I can now see what I think works, and what doesn't work and I could imagine how to improve it, and then instead of just flying blind, you are actually basing your creative decisions on on models of success and failure in the past, and thus could get better right like you could imagine people looking at what already exists and trying to improve on and then actually making something. Even if I were a very interesting creative person who was like seeing this is an opportunity. I feel like I would probably wait for the next company that tries this rather than signing onto the titanic of this. It's difficult to be the first yeah. Yeah? Catherine. Thank you so much for your thoughts on this. It is my pleasure. Talk. And just before you go today news to get you caught up on and DP leader Jagmeet Singh was kicked out of the House of Commons on Wednesday after calling a Bloc Quebecois, MP racist does the honorable member for burnaby south have the unanimous consent of the House to move the motion. I'm sorry. This exchange happened after an MVP motion on systemic racism in the RCMP failed to receive unanimous consent Singh refused to withdraw his comments or to apologize to block number eleven. Tell the AN. And was asked to leave for the remainder of the day that MP Donnelly seen no, but make eye contact with me and just kind of. Precious hand, dismiss it in a moment I got angry. Angry. I'm sad now. Because why can't we act? And after a long campaign by Prime, Minister Trudeau Canada has lost its bid for a seat on the UN Security Council. This marks the second consecutive time. Canada tried to lobby for a spot. Ireland Norway won the election for the two available nonpermanent seats. I'm Josh Block Sees Marl. For more CBC podcasts. GOTO CBC DOT CA slash podcasts.