Really hard to compete in a media market with a half-dozen established competitors. It requires breakout shows and/or a completely different approach to content and audiences. Fox did it in the late 80s with the Simpsons. The niche approach can work, too, if it truly dominates (like ESPN did in the first 15 years of its existence).
oh man thank god, what a weird desperate play with no partner vertical TV manufacturers to show content and constraining to mobile devices basically made this unusable as a streaming platform
seems like this was a "oops wrong time" money overinvestment? like they made a serious play to enter the market and then, bam everyones back to TV only... great your market has just died essentially and the essential workers don't care for new age apps for content quite as much as the free time on the facebook shuttle crowd
> I wouldn't have guessed people cared about temporary video messages, but look at Snap.
Nobody's paying for Snap either. The only reason they are (somewhat) alive is because advertisers still think burning money on annoying people is worth it based on inflated or misleading metrics. Once the adtech bubble pops they'll be down the toilet as well.
> Seems like a lesson learned about raising money to solve something people don't care about... in this case a first-class mobile experience...
People do want a first-class mobile experience (see TikTok), they just don't want to pay a premium for it. If you charge people for something, you better make damn sure it's way better than the free alternative.
YouTube premium has 20mm paying users. Educated guess most of users consume through a mobile device.
Biggest issue with Quibi was lack of app for TV. They cut their TAM by only focusing on Mobile. I don’t think YouTube premium would be as popular if it was only for 1 platform.
Nobody pays for Youtube Premium because they want the exclusive content. They pay because they hate ads and Youtube gatekeeps basic app functionality behind the paywall. It's not a service it's a hostage negotiation.
Ublock works just fine on Firefox mobile; all you have to do is play YouTube in the browser and not the native app. Sadly, this does not resolve the "disable playback while the screen is off" functionality.
My TV is behind Pi-hole and I'm pretty sure I've never seen an ad on my TV (or while casting).
On phones... sometimes, but that's usually fixed within a day or two.
Before others crucify me for not paying for the content: I'm paying for a subscription service where most of the YouTube channels I follow mirror their content (https://watchnebula.com/). I just cut out Google as an unnecessary middleman.
What? Most video content is exclusive to a single platform already? If you think HBO, Disney+, Netflix originals, etc., are too expensive, you don't have other options there either in paying less from someone else. Why should you expect to be able to do so??
If anything YouTube is the most open platform by far, because the vast majority of the content on there is owned by the creators, not YouTube, and thus it could be on other platforms, in a way that will never happen with the paid streaming services. Indeed this is even happening with CuriosityStream.
Nothing at all. I'm not making a value judgment on Youtube Premium. I'm saying it's not the same class of service as Quibi and thus not a counter-example for how Quibi could/should have succeeded. They're fundamentally different things with completely different non-user to paying customer paths. Quibi wasn't Youtube. Quibi is 2013 Netflix if it didn't have any non-original content. Except 2013 Netflix wasn't dumb enough to charge you money and still show you ads.
> They pay because they hate ads and Youtube gatekeeps basic app functionality behind the paywall.
Ding, ding, ding! The accuracy of this statement is frightening.
I'm annoyed with YT pushing major media orgs' content out because the only reason I watch it is for the smaller creators. But the reality is the ads are annoying.
And it's worth paying for just to be able to listen to the app with the screen turned off. I've also warmed up quite a bit to YT Music even if the UI feels a bit rough around the edges (browser; mobile is OK).
That's me exactly, I paid for the download feature when I use to fly a lot, now I pay because otherwise the ads to content ratio is so bad I don't even try to keep up with creators I like
Based on the sheer volume of content consumed on youtube, some people might genuinely want to support the creators they watch without seeing ads. I'm forever seeing people on HN saying "just let me pay for it instead of watching ads" well youtube gave that option.
"Let me pay for it instead of watching ads" is the part that's said out loud. The part that's only implied is "and stop tracking me, stop making recommendations with the sole purpose of distracting me/keeping me here longer, etc". The part that isn't said is "stop treating me like the product".
No one wants to pay for something where they're still the product being sold. Youtube Premium still has all its trackers, still recommends videos not that it think you will find interesting but that it thinks will keep you watching (for better or worse), and still feeds all of your data into the Google ads network for companies to target you on other websites.
I registered a .us domain yesterday (which doesn't support WHOIS protection-esque anonymity services) and so far today I've received:
* 6 phone calls
* 4 voicemails
* 9 emails
all from what looks like companies from third-world countries offering business development services, website designs, app developers, logo design, etc, specifically asking about the new domain I purchased.
On one hand yes. On the other hand, YouTube recommendations are pretty great. The last time I went to the homepage on a fresh browser, I found almost none of the content interesting. If websites end up tracking users without sending ads and you have self control (turn off notifications and only watch for a fixed amount of time) then it's not an issue.
It's kind of a surprising amount of money, don't watch any of the exclusive content or other services, but I pay for YouTube because I don't want my kid watching ads. I cringe when he has a teacher that plays a video and pre-roll comes up (I almost forget YouTube has ads). What's really annoying is that is school's Google account doesn't have it and his personal does...so there's a bit of annoying Google account juggling.
Why would you be entitled to any level of service for a product that you aren't paying any money for? YouTube isn't free to run. All that bandwidth, engineering work, and creator compensation don't pay for themselves. You either pay with ad views or you pay with cash. YouTube doesn't owe anyone a free experience. They could lock the entire site behind a paywall to paid subscribers only tomorrow, and thus be exactly like Netflix, Disney+, HBO, etc., and they'd be entirely within their rights to do so.
They had to go out of their way to prevent videos from playing audio in the background. They're objectively gatekeeping basic functionality behind a paywall, independently of whether anyone feels entitled to those features.
Yes, companies purposely don't include all desired features in the free tier as an incentive to induce users to upgrade to the paid tier. And features are liable to move between tiers as they fine-tune their monetization strategy.
Yes, they are absolutely doing all of this, and it's entirely within their remit to do so because no one is entitled to any of it for free. Why should they offer all of their basic functionality for free if that means they're not making as much money as they could be if they charged for it instead? The only people they owe background audio playback to are those paying for it, and those people are getting it.
What are you going on about? You have nearly a dozen comments where either I'm seriously misunderstanding everyone involved or you're hell-bent on believing that any description of YouTube's business practices must be a complaint that more things aren't free.
E.g.:
> Ancestor: [paraphrased] YouTube makes money by doing extra work to make a free service more painful to use and then charging to remove those annoyances.
> You: [paraphrased] What makes <ancestor> so entitled as to think that you deserve the free service without the annoyances?
> Me: [paraphrased] No, YouTube is definitely intentionally removing features from their free service and offering to add them back if you pay them. That's true whether or not anyone feels entitled to those features.
> You: [paraphrased] Well duh, it's they're right, and why should they offer those features for free in the first place?
It's a brilliant freemium model that still gives everyone access except those who want a bonus luxury.
You'll have to close the gap on why you think it's bad while still acknowledging that they aren't a charity instead of just leaving your point as an exercise for the reader.
So far it's like complaining that Netflix paywalls the "basic functionality" of being able to watch their videos. Or that a game demo only gives you part of a game when you actually want all of it for free.
Features aren't decided by the effort it takes to create them but rather the value they provide, offset by the revenue they generate.
Background video lowers the value of ads which subsidizes free playback so it makes monetary sense to disable it. It's also a trivial amount of work done once.
> Background video lowers the value of ads which subsidizes free playback so it makes monetary sense to disable it.
On the other hand, video is expensive to serve so the ad revenue per gigabyte should be higher, in addition to getting more hours of listening per user. So it makes monetary sense to enable it.
They're both valid options for making money. So it's fair game to analyze it as a matter of user preference, company preference, and level of rudeness.
> It's the same file being delivered, they don't switch to just audio.
Youtube has separate audio and video streams available on almost everything. I'd be very surprised if it wasted that data, and a quick search suggests it doesn't waste that data.
> Even if they did, the ad revenue without video playback is 0.
Sounds like they're doing something wrong in the sales process.
What's wrong with the sales process? Do you have advertising experience or are you just guessing?
You're vastly underestimating how 10s of billions of dollars in advertising transactions are conducted. It's far more involved than just a "sales process".
I wasn't actually accusing them of doing something wrong, I was saying that as the logical conclusion of your claim. I'm fully confident that they are able to get money for those ad slots. How would an ad slot by youtube be worth 0?
Because the format is video ads. They’re not paying for audio only. In fact most of them are optimized for video first with audio secondary by having visuals that communicate the message. You see the same with Facebook video ads in the feed.
If you don’t deliver what the advertiser paid for then you can’t charge for the ad.
Changing the format for audio ads that would run in the limited scenario of background video involves way too much effort and tooling to make it worth it.
I didn't say I was entitled to it. I said they keep basic functions behind the paywall. They're equally within their rights to make non-Premium viewers watch all the videos in black and white or stop non-Premium viewers from using fullscreen.
Yes, they would be within their rights to do all of those things. And ... ?
I can't even read Washington Post and New York Times articles without paying for a subscription. So what? They don't owe anything to me for free. Thus I have paid subscriptions with them, because I value their content enough to pay for it and that's the only compensation methodology they've found to be workable.
"and" that's the difference between Youtube and Quibi. Youtube was built as a free ad-supported platform for users to create content and present it to each other. Quibi was built as a paid streaming service where users watch professionally produced content for a fee. The track from non-user to paid user for Youtube is completely different than the one for Quibi. Youtube Premium targeted an audience that was already there. Quibi tried to get non-users to pay for the creation of the audience. It didn't work, and it will never work. Every successful paid-only streaming service has to target an already-existing audience. Netflix used licensing to target the fanbase of a broad swath of TV and movie viewership, fans who already existed. Disney did it by owning outright a broad swath of TV and movie material.
It generally doesn't even work in other media. CD sales were built on the back of free radio broadcasts. Pay cable and satellite subscriptions targeted an audience already exposed to television through free TV broadcasts. You have to offer a fundamentally better experience, on the order of "this new thing is the only way to experience non-live music" for people to pay for it sight-unseen.
Your initial comment that I was responding to was:
> Nobody pays for Youtube Premium because they want the exclusive content. They pay because they hate ads and Youtube gatekeeps basic app functionality behind the paywall. It's not a service it's a hostage negotiation.
To which my response was that it's a commonly accepted business practice to create free and premium tiers (it's so common it even has a name: "freemium"), and that this doesn't remotely constitute "gatekeeping" or "hostage negotiation". And it is common for companies to switch models over time, starting out with free in order to spur quick growth and then figuring out monetization later. Make no mistake, YouTube was originally losing catastrophic amounts of money, and what has happened to it is the only path that was even viable. You either need a lot of advertising or a substantial paid subscriber base in order to not suffer huge ongoing losses and be forced to shutter. Just ask every newspaper ever.
I just don't see what YouTube has uniquely done differently vs any other company that has a paid tier or that has grown over time and needed to find additional ways to make money because it turns out that you can't turn around a loss by scaling it.
I don't live advertising either. But I accept that it pays for the vast majority of the content that I consume online.
Yes, but my comment was making the point that "Youtube Premium has 20 million subscribers" is not a valid defense of Quibi's business model. Quibi is a paid-only service that doesn't have the ability to draw on a massive active userbase for paid upgrades and bonuses. Whether Youtube's tactics are or are not fair isn't germane.
To the extent that it's not germane, you're the one who brought it up, and it was fair game for me to reply to. I really thought that was the main thrust of your argument (turns out it's not).
The ability to do something like run with the screen off is not "premium", but it is being sold that way. "Hostage negotiation" is obviously hyperbole, but it gets the point across that it is neither paying for content nor paying for actual premium features. It's paying for them to stop being purposefully annoying.
Au contraire, screen-off playback is exactly the kind of feature that is and should be premium, because the value of advertising that can be sold in this situation is significantly reduced, hence it only needs to be available to premium users who are paying for access and thus aren't showed ads anyway.
"Premium" doesn't mean "fancy" or "hard to implement", it just means "We aren't making money giving this away for free, so you have to pay for it".
I completely disagree with your definition of premium. Something has to go beyond basic functionality to be premium, entirely separate of how it's being sold or not sold.
And someone with the screen off is using far less bandwidth. I doubt it's hard to make money off them, even with reduced ad revenue.
In the concept of the freemium payment model, a premium feature is simply one that yo have to pay for. Maybe you should use a word like "advanced" or "deluxe" or something? Regardless, it's an orthogonal concern; it doesn't matter if it's the simplest damn feature in the world, it needs to be for paid users only. Call that what you will; many call it "premium".
I read it as "this feature is premium specifically because it is not free." Businesses are under no obligation to offer basic services for free, even if they did in the past. If this is good for business is different, but YouTube must have had good reason to push all those features to paid. It doesn't matter how much bandwidth is being used, its to block people from using it as a streaming music for free.
Then they should not advertise it as such. I have not looked at youtube ads for a while, but earlier it was definitely advertising "host your videos free, let your friends watch them free from anywhere in the world, yada yada".
If one advertises "absolutely free email hosting" but means "we will read your email, analyze your behavior and sell your information to those who can effectively hound you with ads", people should push back. And "it isn't free to run" is not a valid defense.
> They could lock the entire site behind a paywall to paid subscribers only tomorrow
Sure they can. But that would likely drive most customers away and be a very bad business decision. My 2c.
Obviously if they put it all behind a paywall then they would stop advertising it as free. My point is that it's their right to do so if that's their wont, not that it would necessarily be the best business decision.
> If one advertises "absolutely free email hosting" but means "we will read your email, analyze your behavior and sell your information to those who can effectively hound you with ads", people should push back. And "it isn't free to run" is not a valid defense.
Show me a single freemium service anywhere that advertises itself using such exaggerated language.
I don't understand why people complain about free services like this. You can't eat your cake and have it too. Choose if you want the ad-supported free service or the paid service and then quit complaining about the choice you've made. You're not ever gonna get an ad-free free service that offers all the same features as the paid service. That would be corporate malpractice of the highest order; they'd have $0 revenue!
> My point is that it's their right to do so if that's their wont
Nobody has suggested otherwise, so why do you keep hammering on this point?
> I don't understand why people complain about free services like this.
Free services are not immune to criticism.
If someone is suggesting an unrealistic business model, that's one thing. If they just say a feature is bad, there's no need to argue with them. They are not obligated to "quit complaining"!
I'm tired of people whinging all the time about freemium payment models. It's bringing the quality of discourse down. If you don't have any sort of realistic alternative and you're just complaining about not getting a service for free and without ads, save all of us some time and just don't bother complaining. It's tiresome.
Anyone should understand that every product has a business model, and if it's being given to you for free the company is going to be making money in some other way. I do support the company having to clearly disclose, on their home page or similar, the specific ways they make money.
Yes, Google could charge money for Youtube. But they don't. That doesn't give it any right to expose anyone to advertising. No one forces it to give away anything for free, it does that voluntarily.
So in your model of how the world should work, advertising is banned? Companies are only allowed to offer paid or donation-only services? And most content online ends up being locked behind paywalls as a result?
Either that or publicly funded. Giving customers the choice to opt into ads is another option – if those ads on provide value, as advertisers like to claim.
That is not what I meant and you know it. There is nothing positive about ads – things don't even get cheaper overall, producers have to recoup their ad expenses by charging more than they would in an ad-free world.
There are no absolutes. Things do get cheaper but you're ignoring several factors like scale, branding and just product awareness that make a difference for consumers.
Sometimes there are absolutes, as in this case. If ads benefit customers, they would seek them out. But obviously they don't value that "product awareness" and branding.
Branding helps in selection process. Product awareness helps in choosing a product to fit their needs. Coupons and other promotions are often sought after.
It seems you're unaware of what marketing actually is and are just personally against ads yourself. That's fine, but it doesn't mean there are any absolutes.
Banning push-based advertising isn't without its merits. I'd be surprised if the majority of sales made via push-based advertising which wouldn't have been made in a pull-based system are actually beneficial to the end user (loosely measured by some combination of regret and opportunity cost), and a system that exists purely to extract value from the populace is not worth keeping around in my opinion, especially as a roundabout and inefficient method of payment.
I think most of the downsides would be in second-order effects (like the paywall bit you pointed out) and in effective enforcement (advertising dollars might just shift to realistic-looking review sites for example). I'm hopeful that free content would still be produced, especially given that for my own personal use I've noticed that ads correlate negatively with quality, and with a few exceptions like academic publishing all the best content is free and without ads even in today's world where it's easy to ad ads to a site.
How exactly are you using the terms "push-based" and "pull-based" advertising here? Are you describing "opt-in" vs "opt-out"? I.e. all advertising would be made illegal unless the user explicitly consented to seeing it, which could be done in exchange for free access to services?
It's an interesting idea, but I don't see how it'd be compatible with e.g. the first amendment (especially the unfortunate recent ruling in Citizens United).
And I'm curious as to what exactly your system would look like in regards to such currently ad-supported services as Google Maps, Gmail, Snapchat, Facebook, Instagram, etc. Would your expectation be that most of these would have to become subscription or pay-per-use services with no free tier? Because I don't see any world in which all of the free services would continue to exist as-is without any ability to monetize themselves through advertising revenue.
> How exactly are you using the terms "push-based" and "pull-based" advertising here? Are you describing "opt-in" vs "opt-out"? I.e. all advertising would be made illegal unless the user explicitly consented to seeing it, which could be done in exchange for free access to services?
Slightly stronger still -- all advertising would be made illegal unless the user explicitly sought it out (e.g. searching for things to buy on Amazon, searching for product recommendations, etc....).
> It's an interesting idea, but I don't see how it'd be compatible with e.g. the first amendment (especially the unfortunate recent ruling in Citizens United).
It might not be legally feasible. I know there are places (in the US, since we're invoking the first amendment) which ban billboards, ban specific kinds of ads (e.g. excessively misleading), ban certain ad-location pairings (e.g. no cigarettes targeting children), and so on, so I'm not totally convinced a motivated party couldn't push it through, but that's not my area of expertise.
> And I'm curious as to what exactly your system would look like in regards to such currently ad-supported services as Google Maps, Gmail, Snapchat, Facebook, Instagram, etc. Would your expectation be that most of these would have to become subscription or pay-per-use services with no free tier? Because I don't see any world in which all of the free services would continue to exist as-is without any ability to monetize themselves through advertising revenue.
Haha, that system doesn't define how those services would work at all -- the idea is that from some kind of first principle (the hypothetical assertion is that push-based ads offer little societal value and large detriments above and beyond the effects of pull-based ads, so they're worth removing) we decide that push-based ads ought to be removed, and any second-order consequences are justified as a response. That's definitely the point I'd attack if I wanted to shoot this idea down, because even with seemingly clear-cut behaviors like killing people we still have to carve out exceptions in the law for all the unforeseen consequences of simply making killing illegal.
I hesitate to speculate too far as to how the market might react if such a law were enacted (and not easily circumvented), but some possible options include:
1. Some of those services (e.g., Snapchat seems vulnerable to that change) would cease to exist, and the companies involved would die or regroup around their other offerings. Not all products are viable in all market conditions.
2. Some others would probably be largely unaffected. Google might double down on "shopping" and other kinds of searches that are legally classified as pull-based and still offer a breadth of services to collect data on you (to offer better results for when you do make pull-based ad queries) and to keep you trapped in their ecosystem so that you can't go to a competitor. Their fee structure for results in those subsystems might change drastically.
3. Some businesses that have an ad-supported free tier _might_ keep that free tier as a way to entice users into paid offerings. E.g., YouTube would drop their ads due to the legal requirement but potentially also limit some other product features to try to convert more people to premium, above and beyond the pay-walling they already do.
4. Many smaller free services already only exist as a charity, a hobby, or some other kind of not-my-primary-source-of-income venture. At first glance I don't think those would be much affected, but if free tiers in AWS and GCP or github actions or whatnot are reduced then that could have downstream consequences.
5. If push-based advertising were banned cold-turkey then it's not totally implausible that we'd finally get mass acceptance around some workable micropayment solution. That _might_ even be integrated with a credit system from some pull-based ad behemoth.
They have a social contract with the creators: you upload content for free and users will watch content for free. If they went fully paid creators and viewers would go somewhere else in Ain instant.
I don't think that quite represents the existing social contract with most creators. I think the practical contract is in effect "I will upload content and you will compensate me fairly for it". If a subscription-only model led to increased content creator payouts I don't think you'd see a massive exodus from the platform. Regardless, I'm sure it's in the ToS and all that jazz that any of the terms can be changed at any notice and that your only recourse is to yank your videos and take them elsewhere if you don't like how things are going.
And, interestingly, the biggest exodus I've seen hasn't been to another free platform, it's been to a subscription-only platform (CuriosityStream). The documentary-style YouTubers didn't think they were making enough money on YouTube because of how hard it is to make their content vs your typical vlogging stuff, and they know their viewers are willing to pay more to access it, so they made a pay-only streaming site to earn more money from their product.
you're being downvoted, but as someone who used to pay the monthly ransom to be able to play YouTube audio in the background with the screen off, I wholeheartedly agree. I've never watched YouTube exclusive content and couldn't name anything if asked.
very true. I should have been more clear that I was referring to their whole seamless profile vs landscape thing that I personally thought was silly when I tried Quibi. Seems like a good idea in theory tho
It’s not that other video services don’t have a good mobile experience already.
People just care much more about content than the experience unless it’s really really terrible and even then in the case of shows and movies content comes first.
15 min episodes with lackluster content that are essentially only good for your short commute run isn’t and likely never will be what people are looking for.
I honestly didn’t even knew Quibi existed until this year or maybe late 2019 when they had a huge marketing push for their exclusive shows and those shows sucked. You got a disjointed experience akin to a hallmark movie split into short episodes.
We already tried that with “webisodes” in the past and they didn’t survive once streaming became a thing because they couldn’t match the quality of the content of Netflix and co.
Quibi failed because people don’t mind pausing and the few that do probably would rather watch a 20-30min episode of their favorite sitcoms during commute than 1 or 2 episodes of some Quibi show.
The format especially the portrait mode content was also annoying as fuck, this isn’t instagram.
> I honestly didn’t even knew Quibi existed until this year or maybe late 2019 when they had a huge marketing push for their exclusive shows and those shows sucked.
You didn't know of it earlier because it was founded in 2018 with a product launch in 2020.
I knew about it because the TVrage feed spammed quite a bit new shows I guess around April this year and all of them were Quibi, I watched a few (torrent) and said meh.
It kinda reminded me of the webisodes that were popping out everywhere in the mid 2000’s to early 2010’s.
They poured a lot of money into recognizable but still affordable actors but the content was just boring.
"Paid Youtube alternative focused on mobile" has failed to become huge a couple times now (see Vessel as well).
I'm somewhat baffled by the "if we just raise a bunch more money to produce way more expensive content it'll work this time" logic, but if you're a Hollywood person I think it's probably easy to believe that more grassroots/independent youtube-creator productions wouldn't be able to compete with your A-Listers.
> Who knows, maybe in 10 years we'll all be like "Quibi was really ahead of it's time"
From what I've observed, this only happens in two cases:
* Where there was a fan base that loved the product but it just didn't work out.
* Where there was legitimate innovation behind the offering that can't be fully realized.
I don't think Quibi hits either of these points. There might be other signals I haven't thought through, but these are the 2 main ones I've been able to piece together for when people attribute a company being "ahead of its time".
>Will be really interesting to see if anyone steps up to buy the content...
I would be surprised if anyone does. The reason why Quibi was able to get so many creators onboard is twofold. The first reason is they had a lot of money to spend. The second reason is that the deals they signed were very friendly to creators. Quibi got two years of exclusivity with the content, but they didn't own it outright. The creators could reedit the shows into more traditional formats and resell it after two years or even just give it away for free on Youtube and make whatever they can in ad revenue. So while the content will likely resurface eventually, I can't imagine many big players will want to pick up Quibi's side of those original deals.
Also that initial 1 billion round is just dumb dumb money. Honestly one of the worst things you can do to a early stage startup. Just remove all the breaks and any chance for pivots, it's full steam ahead!
The amount they raised is reasonable if the goal is to create a few flagship shows and dozens of less-expensive ones. They went for A+ film/TV talent and actually managed to close deals with some of them.
Did Quibi ever poach any top talent from the other established competitors? I can't remember seeing them attracting any key hires besides the legacy founding team.
I think this failure was the result of an already segmented TV on demand market. Too many options and adding a new one for x reason was just not appealing to public
The funny thing is there is an active thread right now on HN about breaking up Google (including Youtube.) Supposedly, "there isn't enough competition and there arent options."
I don't think anyone is talking about breaking up YouTube itself, unless I missed something. It would be one of the pieces Google would be broken into.
The notion that people think Google's monopoly exists in the streaming video space just might be the most intellectually dishonest thing I have read today. Neat!
My point is how inconsistent all this is -- on one hand, there is discussion about how YouTube should be broken up because there are not sufficient players. On the other hand a huge contender just shut down because there wasnt sufficient interest in yet another streaming platform.
Working on a bootstrapped project and just imagining what I could do with $2billion... Imagine what half the people on HN could do with it. It's obscene. I think they were trying to essentially buy their way into mainstream adoption, but it doesn't really work like that.
> I think they were trying to essentially buy their way into mainstream adoption, but it doesn't really work like that.
It could work if your product met or was at least close to the minimum quality standard of your competitors. From what I've seen and read, Quibi was horribly substandard.
> trying to essentially buy their way into mainstream adoption, but it doesn't really work like that.
Katzenberg comes from an industry (film studios) for which that is largely the model. They are willing to have some expensive failures ($100MM-scale) if the successes will launch a "franchise" which is subsequently mined.
A failure more than an order of magnitude off what's tolerable in his old industry may be hard to survive, who knows. But industrial filmmaking is a lot like industrial food production: a blend of fear (customers won't adopt the new) and dictating the product to the customer.
Well it was $2Bn not $100MM so don’t know how ppl will feel. Probably call it “Silicon Valley style” and disregard it.
The Hollywood model spends most of that money on ppl and marketing, little on tech. K has no tech experience and W only a smidgeon despite her exec jobs (eBay & HP). So I would be shocked if they spent more than $25MM on their stack which is mostly conventional. I’m sure the rest was blown on marketing, high salaries, consultants, offices, and deals with actors.
thanks for the insight, that's really fascinating!
> I’m sure the rest was blown on marketing, high salaries, consultants, offices, and deals with actors
It sounds like the antithesis of "lean startup". Of course it could have worked out the other way if they had nailed market-fit. It does make me wonder if they could try to salvage the tech and try a slight pivot.
I mean, I'm not sure exactly how much credit to give him, but DreamWorks Animation had a lot of tech and he oversaw it for 20+ years. He stood up a brand new animation studio while the industry was digitizing, which means everyone used in-house tools because off-the-shelf stuff wasn't available. They purchased PDI, had been doing CG since 1980. They maintained a proprietary CG pipeline for decades and integrated multiple locations. This was during a time when the industry went from NURBS to sub-d, from basic direct lighting to global illumination to path-tracing--mostly using software written in-house. Not to mention the larger issues of asset management, data center scaling (power, water, and city requirements) and the staff and budgets to support all of that. At scales only a handful of other facilities were doing CG at, while competing for innovation, scale, and quality.
I'm pretty sure Katzenberg and Whitman courted when she was at HP and they were DreamWorks' "technology partner." They worked together on things like a price-friendly color-accurate LCD monitor and the Halo video conferencing stuff.
I know in the years before DreamWorks was sold to Universal there were Skunk Works projects working on phone apps. I imagine all of that was practice for this. I'm sure most of the money was on content and advertising.
I'm not exactly sure what you mean by not having tech experience, but he definitely oversaw a lot and worked with people who had.
Worth keeping in mind he left that industry because he became relatively incompetent. Business shifted to franchised superhero movies and he didn’t adapt.
>just imagining what I could do with $2billion... Imagine what half the people on HN could do with it
or alternatively twenty thousand 100k research grants in the sciences. Would be pretty great if we could produce some knowledge instead of more mediocre TV shows.
They are getting minimums, but maybe only minimums.
> "Original, live action dramatic new media productions which are less than 20 minutes in length and made for initial exhibition on a subscription video-on-demand consumer pay platform are not subject to” the tiered breakdowns that help set wage scales “regardless of their budgets."
Another interesting point:
> "While Quibi owns the licensing for its shows for seven years, those terms only apply to the short format. A feature-length edit of each show is also made, and after two years, producers/showrunners/other creative intellectual property holders have the right to sell it to distributors."
this is what it looks like when concentrated capital is misallocated. you get one big flop instead of a bunch of small experiments that give you more bites at the red delicious.
> A starting investment of that size probably qualifies it for a record in the fat (as distinct from lean) startup size category as well.
With that kind of funding, and given who the founders are, maybe “startup” shouldn’t be used at all? The linked article didn’t use that term, and I mean, a startup that becomes worth $1B is called a “unicorn”, and this venture was launched with more funding than that.
It's funny that people are so anti-AR/VR that they called Magic Leap a scam for raising $3B, but a 10 minute video streaming app that burns through $2B in 6 months is completely legitimate? I understand that content can be expensive, but Magic Leap did produce actual consumer hardware, and Microsoft and others have spent similar amounts to make comparable hardware. I'm not saying that Magic Leap is a successful company by any stretch, but if ML is a Theranos style scam, then Quibi was as well.
The reason Magic Leap was called a scam is because they demo'd technology that seemed too good to be true and then never produced a consumer product that delivered that demo. That's why people described it as a scam- there was no good faith understanding they could deliver what they promised. Compare that to Quibi where they have a platform, they have the content that they paid for. The problem isn't they promised something they can't deliver, the problem is they delivered something no one wants. It's not difficult to see how you'd pour billions into original content and a distribution platform. Netflix does that. It's difficult to understand how a company can show you a fantastic demo, spend billions on development and then produce a product that doesn't even slightly live up to the demo.
>$2B gone in 6 months must be something of a record for burn rate
2 billion is chump change for the market they're in. Netflix is spending 15 billion a year on content, Amazon and Apple like 6 billion a piece, and Hulu is around 3.
Cash burn is similar. Netflix is 10s of billions in the hole since they were founded and continues to burn a few billon a year.
She spoke at this year's Democratic convention in support of Biden. Not saying that implies the potential for her to end up in his cabinet, but a lot of Republicans have crossed into independent or Democratic territory the last few years (some while retaining Republican party affiliation for now).
Merit is not a component of American meritocracy. If you're born into an ancient line of people with ridiculous ordinal suffixes after their names, study at Princeton and Harvard, and marry some other guy who also has a ridiculous name, you are guaranteed a lifelong supply of lucrative opportunities no matter how many times you have to write down an eight billion dollar loss after a botched acquisition.
While there are outliers, it was never a meritocracy, it's just an aristocracy and all these people at the top are cronies, sitting on the board of each others companies, paying themselves and others outrageous compensations, that why they can fail upwards and get promoted even more with each screw up, because they are here to maintain the power of a clique. I don't know anything about the Whitman family but I guess it's a bit, old, rich one with a lot of political ties everywhere.
Calling all that a meritocracy makes no sense. It never was. Now the problem today is some people thinking that replacing an aristocracy with a nomenklatura is going to make things better for people at the bottom...
There is a theory called the Gervais Principle trying to explain the dynamics on advancement in the corporate based on the The Office TV show. Don't know if it is true or not but you can read about it here: https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...
Just got around to trying it for the first time last night. I waited until they had an app on Android TV. Nice app. I was surprised that most of the videos looked good on the TV, I had assumed they were designed for portrait mode.
This is not the least bit surprising. They never reached product market fit, and anyone who works in video streaming was pretty sure they never would.
Both Netflix and Hulu have experimented with short form "mobile-optimized" viewing. Short things to watch on your commute or between meetings. Neither had much success with the format.
> Quibi also faces a patent infringement lawsuit filed by interactive video company Eko, which alleges that Quibi stole its technology allowing viewers to watch episodes either horizontally or vertically on phones from Eko.
technology allowing viewers to watch episodes either horizontally or vertically
Quibi has a feature where the content changes depending on if you hold your phone in portrait or landscape. It doesn't add very much and it's annoying to switch back and forth.
But this is a massive company which pumped VC money into an untenable idea. I definitely wouldn't have this level of snark if an independent developer, or at least a good faith startup had to shut down.
It's not so much that you owe them better (massive-VC-untenable etc.) — it's that you owe this community better if you're contributing here. Comments like the GP poison the ecosystem.
I think the reason this failed is simply that good content is device agnostic. I don't think there are a lot of people out there watching Netflix on their phones wishing it was all filmed vertically.
This rings so hollow to me. You have tons of people who are all of a sudden working from home and are still doing lunches, or have lots of free time in general in an age where shorter form content is more prevalent.
Yes, that was their target- but were they really only targeting NYC and a handful of other cities commuters? That's a pretty small TAM. Everyone else in a car and not watching content on their phone.
The content was not compelling, and that's the real story. They overpaid to quickly produce a library with star power and the end results were sub par, and could not compete with free alternatives, or depending on how you look at it- could not force their way into the budgets for consumer's paid streaming services.
While this might be true I think it’s easy to point to COVID as being the downfall of many companies now, when the reality is that many would have failed for other reasons.
For Quibi, it seems the fundamental issue may have been lack of product market fit due to a) not testing, and b) having a shallow understanding of the entertainment market.
How many people are we talking though? Subway trains usually don't get good cell reception, and a huge chunk of Americans drive to work, a time during which they wouldn't be watching video.
What's interesting about Quibi is that it somehow broke the mold as being a really bad idea that somehow got a lot of funding. It's hard to get funding and investors aren't usually stupid. You'll have people that'll make you jump through hoops and do their due diligence. But then once in a while, there'll be something that'll just be a mind boggling disaster that somehow breaks through against all norms. Stuff like Theranos or Nikola.
Sidenote: There are so many important OSS projects that basically get little to no funding while things like Quibi burn millions if not billions in the dumbest way possible.
Citation needed. Every portfolio I've looked at outside of the top firms has had multiple investments (approved by partners) that to my mind look mind bogglingly dumb. Not Theranos level of dumb, where they'd have to have a little knowledge of blood based diagnostics and the statistical significance of results from finger pricks to know its a fraud, but "we didn't do due diligence and found out that this is a perpetual motion machine/founder doesn't own critical IP/financials don't make sense in any universe" levels of dumb. The former slip through the cracks at even the best firms, but the latter is like watching a slow motion train wreck.
With the benefit of hindsight, the entire industry looks like thousands of monkeys with typewriters (especially when biotech gets frothy).
It was founded by Jeff Katzenberg, not you or I. They guy probably has the personal number of all the CEOs in the business and they pick up the phone and listen if he calls.
Then, with the success of Youtube, Tiktok, Instagram pitching a premium short videos app does not sound crazy especially, again, when it's Katzenberg pitching it to you (and he must have invested a good chunk of his own cash).
Then he managed to hire Meg Whitman as CEO and first employee. So now it's Whitman and Katzenberg pitching that idea to you.
Investors aren't stupid, they just have to much money not to be a bit lazy about it and they will follow other money, institutions, investors as a shortcut for not being their own analyst. There's alot of money out there, you gotta out it somewhere not in dollars. It makes it easy to blindly follow those previously anointed as geniuses off a cliff.
It seems seems like some combination of Netflix, YouTube, Snapchat stories,
and TikTok that you could throw on a pitch deck and promise investors will be the next version of TV for millennials.
Starting with 100% original programming makes no sense to me. You have 2 billion dollars, license some mega hits to at least bring people in.
I downloaded the app and saw exactly what I was expecting - “Create account” or “Sign in”, no way to play anything or see any previews. People aren’t going to try so hard to seek out these shows they haven’t seen or heard of before.
It may be offline already. The app no longer works. Well, Flipped was good but not worth paying for and the dual screen mode thing added nothing but expense for them.
Don't forget what might be the most incoherent marketing campaign of recent memory. I spent nearly a year seeing Quibi advertisements and had no idea it was a video streaming service until its financial troubles made it to HN.
This is the first I'm hearing that it's a video streaming service. Shutting down is the best marketing move they ever made, let's see if it works out for them.
They had video ads running constantly on Instagram for months. To me, it was pretty clear what the offering was (long form TikTok/Vine/Reels), and not something I really had any interest in.
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[ 3.6 ms ] story [ 417 ms ] threadWill be really interesting to see if anyone steps up to buy the content... but from what little I watched it was all pretty rough.
Seems like a lesson learned about raising money to solve something people don't care about... in this case a first-class mobile experience...
Who knows, maybe in 10 years we'll all be like "Quibi was really ahead of it's time"
It's easy to look back and say that. I wouldn't have guessed people cared about temporary video messages, but look at Snap.
Quibi gave you portrait TV shows with low production value with actors trying to cash in on the remainder of their GoT fame.
Nobody's paying for Snap either. The only reason they are (somewhat) alive is because advertisers still think burning money on annoying people is worth it based on inflated or misleading metrics. Once the adtech bubble pops they'll be down the toilet as well.
People do want a first-class mobile experience (see TikTok), they just don't want to pay a premium for it. If you charge people for something, you better make damn sure it's way better than the free alternative.
Biggest issue with Quibi was lack of app for TV. They cut their TAM by only focusing on Mobile. I don’t think YouTube premium would be as popular if it was only for 1 platform.
For Android, the other comment suggests uBlock Origin which I definitely recommend (even for other reasons beyond YouTube).
On phones... sometimes, but that's usually fixed within a day or two.
Before others crucify me for not paying for the content: I'm paying for a subscription service where most of the YouTube channels I follow mirror their content (https://watchnebula.com/). I just cut out Google as an unnecessary middleman.
Also is there anything wrong with offering a paid service which offers removing ads and getting some extra functionality?
If anything YouTube is the most open platform by far, because the vast majority of the content on there is owned by the creators, not YouTube, and thus it could be on other platforms, in a way that will never happen with the paid streaming services. Indeed this is even happening with CuriosityStream.
Ding, ding, ding! The accuracy of this statement is frightening.
I'm annoyed with YT pushing major media orgs' content out because the only reason I watch it is for the smaller creators. But the reality is the ads are annoying.
And it's worth paying for just to be able to listen to the app with the screen turned off. I've also warmed up quite a bit to YT Music even if the UI feels a bit rough around the edges (browser; mobile is OK).
But the ads? Yeah, that's a big reason.
No one wants to pay for something where they're still the product being sold. Youtube Premium still has all its trackers, still recommends videos not that it think you will find interesting but that it thinks will keep you watching (for better or worse), and still feeds all of your data into the Google ads network for companies to target you on other websites.
* 6 phone calls
* 4 voicemails
* 9 emails
all from what looks like companies from third-world countries offering business development services, website designs, app developers, logo design, etc, specifically asking about the new domain I purchased.
:(
Back when it was introduced on Android, it worked on YouTube just fine. Then it was intentially broken (hidden behind a paywall).
E.g.:
> Ancestor: [paraphrased] YouTube makes money by doing extra work to make a free service more painful to use and then charging to remove those annoyances.
> You: [paraphrased] What makes <ancestor> so entitled as to think that you deserve the free service without the annoyances?
> Me: [paraphrased] No, YouTube is definitely intentionally removing features from their free service and offering to add them back if you pay them. That's true whether or not anyone feels entitled to those features.
> You: [paraphrased] Well duh, it's they're right, and why should they offer those features for free in the first place?
You'll have to close the gap on why you think it's bad while still acknowledging that they aren't a charity instead of just leaving your point as an exercise for the reader.
So far it's like complaining that Netflix paywalls the "basic functionality" of being able to watch their videos. Or that a game demo only gives you part of a game when you actually want all of it for free.
No, I don't. Whether or not I think that's bad is entirely orthogonal to what I actually said.
Background video lowers the value of ads which subsidizes free playback so it makes monetary sense to disable it. It's also a trivial amount of work done once.
On the other hand, video is expensive to serve so the ad revenue per gigabyte should be higher, in addition to getting more hours of listening per user. So it makes monetary sense to enable it.
They're both valid options for making money. So it's fair game to analyze it as a matter of user preference, company preference, and level of rudeness.
Even if they did, the ad revenue without video playback is 0. Advertisers are paying for impressions and views, not sound only.
Youtube has separate audio and video streams available on almost everything. I'd be very surprised if it wasted that data, and a quick search suggests it doesn't waste that data.
> Even if they did, the ad revenue without video playback is 0.
Sounds like they're doing something wrong in the sales process.
You're vastly underestimating how 10s of billions of dollars in advertising transactions are conducted. It's far more involved than just a "sales process".
If you don’t deliver what the advertiser paid for then you can’t charge for the ad.
Changing the format for audio ads that would run in the limited scenario of background video involves way too much effort and tooling to make it worth it.
I can't even read Washington Post and New York Times articles without paying for a subscription. So what? They don't owe anything to me for free. Thus I have paid subscriptions with them, because I value their content enough to pay for it and that's the only compensation methodology they've found to be workable.
It generally doesn't even work in other media. CD sales were built on the back of free radio broadcasts. Pay cable and satellite subscriptions targeted an audience already exposed to television through free TV broadcasts. You have to offer a fundamentally better experience, on the order of "this new thing is the only way to experience non-live music" for people to pay for it sight-unseen.
> Nobody pays for Youtube Premium because they want the exclusive content. They pay because they hate ads and Youtube gatekeeps basic app functionality behind the paywall. It's not a service it's a hostage negotiation.
To which my response was that it's a commonly accepted business practice to create free and premium tiers (it's so common it even has a name: "freemium"), and that this doesn't remotely constitute "gatekeeping" or "hostage negotiation". And it is common for companies to switch models over time, starting out with free in order to spur quick growth and then figuring out monetization later. Make no mistake, YouTube was originally losing catastrophic amounts of money, and what has happened to it is the only path that was even viable. You either need a lot of advertising or a substantial paid subscriber base in order to not suffer huge ongoing losses and be forced to shutter. Just ask every newspaper ever.
I just don't see what YouTube has uniquely done differently vs any other company that has a paid tier or that has grown over time and needed to find additional ways to make money because it turns out that you can't turn around a loss by scaling it.
I don't live advertising either. But I accept that it pays for the vast majority of the content that I consume online.
"Premium" doesn't mean "fancy" or "hard to implement", it just means "We aren't making money giving this away for free, so you have to pay for it".
And someone with the screen off is using far less bandwidth. I doubt it's hard to make money off them, even with reduced ad revenue.
Then they should not advertise it as such. I have not looked at youtube ads for a while, but earlier it was definitely advertising "host your videos free, let your friends watch them free from anywhere in the world, yada yada".
If one advertises "absolutely free email hosting" but means "we will read your email, analyze your behavior and sell your information to those who can effectively hound you with ads", people should push back. And "it isn't free to run" is not a valid defense.
> They could lock the entire site behind a paywall to paid subscribers only tomorrow
Sure they can. But that would likely drive most customers away and be a very bad business decision. My 2c.
> If one advertises "absolutely free email hosting" but means "we will read your email, analyze your behavior and sell your information to those who can effectively hound you with ads", people should push back. And "it isn't free to run" is not a valid defense.
Show me a single freemium service anywhere that advertises itself using such exaggerated language.
I don't understand why people complain about free services like this. You can't eat your cake and have it too. Choose if you want the ad-supported free service or the paid service and then quit complaining about the choice you've made. You're not ever gonna get an ad-free free service that offers all the same features as the paid service. That would be corporate malpractice of the highest order; they'd have $0 revenue!
Nobody has suggested otherwise, so why do you keep hammering on this point?
> I don't understand why people complain about free services like this.
Free services are not immune to criticism.
If someone is suggesting an unrealistic business model, that's one thing. If they just say a feature is bad, there's no need to argue with them. They are not obligated to "quit complaining"!
It seems you're unaware of what marketing actually is and are just personally against ads yourself. That's fine, but it doesn't mean there are any absolutes.
I think most of the downsides would be in second-order effects (like the paywall bit you pointed out) and in effective enforcement (advertising dollars might just shift to realistic-looking review sites for example). I'm hopeful that free content would still be produced, especially given that for my own personal use I've noticed that ads correlate negatively with quality, and with a few exceptions like academic publishing all the best content is free and without ads even in today's world where it's easy to ad ads to a site.
It's an interesting idea, but I don't see how it'd be compatible with e.g. the first amendment (especially the unfortunate recent ruling in Citizens United).
And I'm curious as to what exactly your system would look like in regards to such currently ad-supported services as Google Maps, Gmail, Snapchat, Facebook, Instagram, etc. Would your expectation be that most of these would have to become subscription or pay-per-use services with no free tier? Because I don't see any world in which all of the free services would continue to exist as-is without any ability to monetize themselves through advertising revenue.
Slightly stronger still -- all advertising would be made illegal unless the user explicitly sought it out (e.g. searching for things to buy on Amazon, searching for product recommendations, etc....).
> It's an interesting idea, but I don't see how it'd be compatible with e.g. the first amendment (especially the unfortunate recent ruling in Citizens United).
It might not be legally feasible. I know there are places (in the US, since we're invoking the first amendment) which ban billboards, ban specific kinds of ads (e.g. excessively misleading), ban certain ad-location pairings (e.g. no cigarettes targeting children), and so on, so I'm not totally convinced a motivated party couldn't push it through, but that's not my area of expertise.
> And I'm curious as to what exactly your system would look like in regards to such currently ad-supported services as Google Maps, Gmail, Snapchat, Facebook, Instagram, etc. Would your expectation be that most of these would have to become subscription or pay-per-use services with no free tier? Because I don't see any world in which all of the free services would continue to exist as-is without any ability to monetize themselves through advertising revenue.
Haha, that system doesn't define how those services would work at all -- the idea is that from some kind of first principle (the hypothetical assertion is that push-based ads offer little societal value and large detriments above and beyond the effects of pull-based ads, so they're worth removing) we decide that push-based ads ought to be removed, and any second-order consequences are justified as a response. That's definitely the point I'd attack if I wanted to shoot this idea down, because even with seemingly clear-cut behaviors like killing people we still have to carve out exceptions in the law for all the unforeseen consequences of simply making killing illegal.
I hesitate to speculate too far as to how the market might react if such a law were enacted (and not easily circumvented), but some possible options include:
1. Some of those services (e.g., Snapchat seems vulnerable to that change) would cease to exist, and the companies involved would die or regroup around their other offerings. Not all products are viable in all market conditions.
2. Some others would probably be largely unaffected. Google might double down on "shopping" and other kinds of searches that are legally classified as pull-based and still offer a breadth of services to collect data on you (to offer better results for when you do make pull-based ad queries) and to keep you trapped in their ecosystem so that you can't go to a competitor. Their fee structure for results in those subsystems might change drastically.
3. Some businesses that have an ad-supported free tier _might_ keep that free tier as a way to entice users into paid offerings. E.g., YouTube would drop their ads due to the legal requirement but potentially also limit some other product features to try to convert more people to premium, above and beyond the pay-walling they already do.
4. Many smaller free services already only exist as a charity, a hobby, or some other kind of not-my-primary-source-of-income venture. At first glance I don't think those would be much affected, but if free tiers in AWS and GCP or github actions or whatnot are reduced then that could have downstream consequences.
5. If push-based advertising were banned cold-turkey then it's not totally implausible that we'd finally get mass acceptance around some workable micropayment solution. That _might_ even be integrated with a credit system from some pull-based ad behemoth.
6. Those...
And, interestingly, the biggest exodus I've seen hasn't been to another free platform, it's been to a subscription-only platform (CuriosityStream). The documentary-style YouTubers didn't think they were making enough money on YouTube because of how hard it is to make their content vs your typical vlogging stuff, and they know their viewers are willing to pay more to access it, so they made a pay-only streaming site to earn more money from their product.
But I'd say 90% of my youtube consumption is on TV.
People just care much more about content than the experience unless it’s really really terrible and even then in the case of shows and movies content comes first.
15 min episodes with lackluster content that are essentially only good for your short commute run isn’t and likely never will be what people are looking for.
I honestly didn’t even knew Quibi existed until this year or maybe late 2019 when they had a huge marketing push for their exclusive shows and those shows sucked. You got a disjointed experience akin to a hallmark movie split into short episodes.
We already tried that with “webisodes” in the past and they didn’t survive once streaming became a thing because they couldn’t match the quality of the content of Netflix and co.
Quibi failed because people don’t mind pausing and the few that do probably would rather watch a 20-30min episode of their favorite sitcoms during commute than 1 or 2 episodes of some Quibi show.
The format especially the portrait mode content was also annoying as fuck, this isn’t instagram.
You didn't know of it earlier because it was founded in 2018 with a product launch in 2020.
Uhh..so? It didn't even launch until April 2020.
It kinda reminded me of the webisodes that were popping out everywhere in the mid 2000’s to early 2010’s. They poured a lot of money into recognizable but still affordable actors but the content was just boring.
I'm somewhat baffled by the "if we just raise a bunch more money to produce way more expensive content it'll work this time" logic, but if you're a Hollywood person I think it's probably easy to believe that more grassroots/independent youtube-creator productions wouldn't be able to compete with your A-Listers.
From what I've observed, this only happens in two cases:
* Where there was a fan base that loved the product but it just didn't work out.
* Where there was legitimate innovation behind the offering that can't be fully realized.
I don't think Quibi hits either of these points. There might be other signals I haven't thought through, but these are the 2 main ones I've been able to piece together for when people attribute a company being "ahead of its time".
I would be surprised if anyone does. The reason why Quibi was able to get so many creators onboard is twofold. The first reason is they had a lot of money to spend. The second reason is that the deals they signed were very friendly to creators. Quibi got two years of exclusivity with the content, but they didn't own it outright. The creators could reedit the shows into more traditional formats and resell it after two years or even just give it away for free on Youtube and make whatever they can in ad revenue. So while the content will likely resurface eventually, I can't imagine many big players will want to pick up Quibi's side of those original deals.
The amount they raised is reasonable if the goal is to create a few flagship shows and dozens of less-expensive ones. They went for A+ film/TV talent and actually managed to close deals with some of them.
Quibi shutting down is met with a resounding lol from every demographic on the planet the end
I don't think anyone is talking about breaking up YouTube itself, unless I missed something. It would be one of the pieces Google would be broken into.
https://news.ycombinator.com/item?id=24852504
https://news.ycombinator.com/item?id=24850702
https://news.ycombinator.com/item?id=24849147
My point is how inconsistent all this is -- on one hand, there is discussion about how YouTube should be broken up because there are not sufficient players. On the other hand a huge contender just shut down because there wasnt sufficient interest in yet another streaming platform.
A starting investment of that size probably qualifies it for a record in the fat (as distinct from lean) startup size category as well.
It could work if your product met or was at least close to the minimum quality standard of your competitors. From what I've seen and read, Quibi was horribly substandard.
Katzenberg comes from an industry (film studios) for which that is largely the model. They are willing to have some expensive failures ($100MM-scale) if the successes will launch a "franchise" which is subsequently mined.
A failure more than an order of magnitude off what's tolerable in his old industry may be hard to survive, who knows. But industrial filmmaking is a lot like industrial food production: a blend of fear (customers won't adopt the new) and dictating the product to the customer.
that makes sense, and definitely feels like they were building a rocket-sized dart to throw.
it'd be interesting to see the breakdown on how much of that capital went towards engineering the app vs content/other.
The Hollywood model spends most of that money on ppl and marketing, little on tech. K has no tech experience and W only a smidgeon despite her exec jobs (eBay & HP). So I would be shocked if they spent more than $25MM on their stack which is mostly conventional. I’m sure the rest was blown on marketing, high salaries, consultants, offices, and deals with actors.
> I’m sure the rest was blown on marketing, high salaries, consultants, offices, and deals with actors
It sounds like the antithesis of "lean startup". Of course it could have worked out the other way if they had nailed market-fit. It does make me wonder if they could try to salvage the tech and try a slight pivot.
I mean, I'm not sure exactly how much credit to give him, but DreamWorks Animation had a lot of tech and he oversaw it for 20+ years. He stood up a brand new animation studio while the industry was digitizing, which means everyone used in-house tools because off-the-shelf stuff wasn't available. They purchased PDI, had been doing CG since 1980. They maintained a proprietary CG pipeline for decades and integrated multiple locations. This was during a time when the industry went from NURBS to sub-d, from basic direct lighting to global illumination to path-tracing--mostly using software written in-house. Not to mention the larger issues of asset management, data center scaling (power, water, and city requirements) and the staff and budgets to support all of that. At scales only a handful of other facilities were doing CG at, while competing for innovation, scale, and quality.
I'm pretty sure Katzenberg and Whitman courted when she was at HP and they were DreamWorks' "technology partner." They worked together on things like a price-friendly color-accurate LCD monitor and the Halo video conferencing stuff.
I know in the years before DreamWorks was sold to Universal there were Skunk Works projects working on phone apps. I imagine all of that was practice for this. I'm sure most of the money was on content and advertising.
I'm not exactly sure what you mean by not having tech experience, but he definitely oversaw a lot and worked with people who had.
or alternatively twenty thousand 100k research grants in the sciences. Would be pretty great if we could produce some knowledge instead of more mediocre TV shows.
> "Among the backers were most of the major Hollywood studios, Google, Alibaba and the Madrone Capital Partners."
I wonder how much of that $2B was eaten up with "Hollywood Accounting"
Trust me -- this was a bonanza for them. There's never been a greater demand for content than the past couple years, with platforms exploding.
No need to worry about actors or crew being exploited. Happily, the union makes sure of that! (E.g. in contrast to the tech world.)
They are getting minimums, but maybe only minimums.
> "Original, live action dramatic new media productions which are less than 20 minutes in length and made for initial exhibition on a subscription video-on-demand consumer pay platform are not subject to” the tiered breakdowns that help set wage scales “regardless of their budgets."
Another interesting point:
> "While Quibi owns the licensing for its shows for seven years, those terms only apply to the short format. A feature-length edit of each show is also made, and after two years, producers/showrunners/other creative intellectual property holders have the right to sell it to distributors."
Given how much tech pays versus how easy it's to get into tech (ie: compared to becoming a well paying lawyer or doctor) I doubt too many people mind.
[1]: https://mobile.twitter.com/LukeXCunningham/status/1318982719...
With that kind of funding, and given who the founders are, maybe “startup” shouldn’t be used at all? The linked article didn’t use that term, and I mean, a startup that becomes worth $1B is called a “unicorn”, and this venture was launched with more funding than that.
2 billion is chump change for the market they're in. Netflix is spending 15 billion a year on content, Amazon and Apple like 6 billion a piece, and Hulu is around 3.
Cash burn is similar. Netflix is 10s of billions in the hole since they were founded and continues to burn a few billon a year.
https://newrepublic.com/article/159892/republicans-meg-whitm...
Calling all that a meritocracy makes no sense. It never was. Now the problem today is some people thinking that replacing an aristocracy with a nomenklatura is going to make things better for people at the bottom...
Both Netflix and Hulu have experimented with short form "mobile-optimized" viewing. Short things to watch on your commute or between meetings. Neither had much success with the format.
No, don't you understand I totally want to pay $10 a month to hold my phone awkwardly and watch 10 minute videos.
What could go wrong
Which way is that?
> Quibi also faces a patent infringement lawsuit filed by interactive video company Eko, which alleges that Quibi stole its technology allowing viewers to watch episodes either horizontally or vertically on phones from Eko.
technology allowing viewers to watch episodes either horizontally or vertically
What da fak!
Please especially don't do that to dance on someone's grave. I'm sure that you can express your substantive points thoughtfully.
But this is a massive company which pumped VC money into an untenable idea. I definitely wouldn't have this level of snark if an independent developer, or at least a good faith startup had to shut down.
Yes, that was their target- but were they really only targeting NYC and a handful of other cities commuters? That's a pretty small TAM. Everyone else in a car and not watching content on their phone.
The content was not compelling, and that's the real story. They overpaid to quickly produce a library with star power and the end results were sub par, and could not compete with free alternatives, or depending on how you look at it- could not force their way into the budgets for consumer's paid streaming services.
For Quibi, it seems the fundamental issue may have been lack of product market fit due to a) not testing, and b) having a shallow understanding of the entertainment market.
Sidenote: There are so many important OSS projects that basically get little to no funding while things like Quibi burn millions if not billions in the dumbest way possible.
Citation needed. Every portfolio I've looked at outside of the top firms has had multiple investments (approved by partners) that to my mind look mind bogglingly dumb. Not Theranos level of dumb, where they'd have to have a little knowledge of blood based diagnostics and the statistical significance of results from finger pricks to know its a fraud, but "we didn't do due diligence and found out that this is a perpetual motion machine/founder doesn't own critical IP/financials don't make sense in any universe" levels of dumb. The former slip through the cracks at even the best firms, but the latter is like watching a slow motion train wreck.
With the benefit of hindsight, the entire industry looks like thousands of monkeys with typewriters (especially when biotech gets frothy).
Then, with the success of Youtube, Tiktok, Instagram pitching a premium short videos app does not sound crazy especially, again, when it's Katzenberg pitching it to you (and he must have invested a good chunk of his own cash).
Then he managed to hire Meg Whitman as CEO and first employee. So now it's Whitman and Katzenberg pitching that idea to you.
It seems seems like some combination of Netflix, YouTube, Snapchat stories, and TikTok that you could throw on a pitch deck and promise investors will be the next version of TV for millennials.
Starting with 100% original programming makes no sense to me. You have 2 billion dollars, license some mega hits to at least bring people in. I downloaded the app and saw exactly what I was expecting - “Create account” or “Sign in”, no way to play anything or see any previews. People aren’t going to try so hard to seek out these shows they haven’t seen or heard of before.