Is Anyone Watching Quibi?
The streaming platform raised $1.75 billion and secured a roster of A-list talent, but it can’t get audiences to notice.
www.vulture.com
Is Anyone Watching Quibi?
The streaming platform raised $1.75 billion and secured a roster of A-list talent, but it can’t get audiences to notice.
By Benjamin Wallace
Emmy Insider
The Emmy race has begun! Vulture is taking a close look at the contenders until nomination-round voting closes on July 13.
Illustration: Vulture and Photos Courtesy of Quibi
Last year, Scott Gairdner, a comedy writer and director who had worked on Conan and created the animated series Moonbeam City, went to the Hollywood offices of the new streaming platform Quibi for a pitch meeting. He is also the co-creator of a viral Adult Swim video called Live at the Necropolis: Lords of Synth, which Quibi was considering adapting. Gairdner was provisionally excited. In a business where new players pop up only to evaporate, he was used to deals never quite materializing. But a new, deep-pocketed buyer was cause for optimism.
Quibi, the brainchild of Jeffrey Katzenberg, the former Disney studio head and DreamWorks co-founder, had promised to reinvent television by streaming high-quality content in ten-minute-or-less chunks to “the TV in your pocket.” (Quibi, which rhymes with Libby, is short for “quick bites.”) Katzenberg believed enough mobile-phone users would want to spend their spare minutes of downtime — while waiting in line for coffee, riding the bus or subway — digesting small plates of premium, Hollywood-quality video, at a monthly cost of $4.99 (with ads) or $7.99 (without ads), when not surfing the amateur stuff on TikTok and -YouTube, scrolling Twitter, or playing Animal Crossing for free. And he was spending lavishly on his hunch.
“I can honestly say I’ve never been in such a cocky pitch environment,” Gairdner recalls. “I would describe the atmosphere as almost Wolf of Wall Street, not in terms of actual debauchery, but it’s an incredibly nice office that just goes and goes. They had two lobbies; you went in and checked in at a nice, big lobby, then you were moved to another lobby. There’s massive jars of expensive, nice-seeming candy everywhere. It’s sleek and modern, and you see hundreds of people passing by. And there’s this energy of people who really believe they’ve got the next big thing.”
Quibi was to launch in the spring of 2020 with 50 original shows, and another 125 were to be rolled out by the end of the first year. Recognizing the risk of making something for an unproven platform, Katzenberg typically offered to pay producers’ costs plus 20 percent. “People on Quibi have $100,000 a minute to make content,” Katzenberg tells me. “That doesn’t exist on other platforms.” Producers who went into meetings with him skeptical walked out thinking he might be onto something. “He pitched me at Nate ’n Al’s, and my eyes lit up,” recalls Jason Blum, whose horror-focused Blumhouse Productions was behind Paranormal Activity, The Purge, and Get Out. Blum signed on to make Wolves and Thieves, starring Naomi Watts, and, later, two other series.
Blum wasn’t alone. Drawing on his deep well of relationships earned after more than four decades in Hollywood, Katzenberg recruited an amazing array of talent: Sam Raimi would produce a horror anthology; Idris Elba would star in a car-stunts show; Chrissy Teigen would put on judge’s robes and comically preside over a courtroom; Lena Waithe would make a show about sneakerheads; Anna Kendrick would anchor a comedy in which her character befriends her boyfriend’s sex doll; and the Kardashians would do a mock reality show featuring a mythical fraternal twin brother named Kirby Jenner.
Katzenberg also went after buzzy scripts like Frat Boy Genius, about Snapchat founder Evan Spiegel, which had ranked first in 2018’s edition of the Black List, an influential roster of the best unproduced scripts as adjudged by agents, managers, and producers. Dramatizing Snapchat’s origin story the way The Social Network had Facebook’s, this was the kind of project that might do for Quibi what House of Cards and Orange Is the New Black had done for Netflix and The Mandalorian would do for Disney+. In buying it, Katzenberg was slyly putting Quibi in the company of an app whose visionary technology and financial bonanza he hoped to duplicate.
People on Quibi have $100,000 a minute to make content. That doesn’t exist on other platforms.
To some storytellers, Quibi represented virgin creative soil. The director Guillermo del Toro animatedly told me he had come up with a project that uses Quibi’s frequent breaks “not as a syntactic narrative device only, but to reflect the story. Every ten minutes, you’ll get a swerve, a fork in the road.” For producers of unscripted shows, Quibi offered a rare chance to make their silliest ideas, like Barkitecture (exotic luxury kennels are made for dogs) and Dishmantled, in which two blindfolded chef-contestants are blasted with a cannonload of mystery-food gloop and must identify the ingredients by taste, then use them to reconstruct the dish. Quibi’s future seemed unlimited, and for a moment, when it launched on April 6, it looked as if all of Katzenberg’s glorious predictions might come to pass. That first day, the Quibi app rose to No. 3 in Apple’s App Store.
Instead, Quibi has foundered. The app’s ranking dropped to No. 284 by mid-June. A handful of shows, such as a reboot of Reno 911!, seem to have found an audience (it’s impossible to know precisely how large an audience, since Quibi, like other streamers, doesn’t release numbers), but critical attention has focused mostly on the flops. The Golden Arm, an installment of Raimi’s horror anthology starring Rachel Brosnahan, went quasi-viral more for its camp hilarity (“Bury me with my golden arm,” Brosnahan’s “pulmonary gold disease”–afflicted prosthesis-wearer commands her husband) than because anyone thought it was scary. “Yep, Quibi Is Bad” was the headline on an article by one of this magazine’s TV critics. The Guardian called Quibi “an idea born in an L.A. conference room that will probably die in the real world.”
That Quibi managed to spend ungodly amounts of money for high-gloss Hollywood content with A-list talent only to end up without a discernible hit has inspired a substantial amount of Schadenfreude. Jimmy Kimmel, hosting a virtual version of Disney-ABC’s annual upfront, said, “Here I am, standing here like a fucking fool with nobody watching. I feel like every show on Quibi right now.” Gairdner, who walked out of Quibi without a deal (“It was just clear that if we didn’t have a celebrity attached, they weren’t interested”), unveiled a satirical website called Swippi, in which longer videos are arbitrarily broken up into short chunks, sometimes in the middle of a scene. “We realized people want to take Swift Sips of content,” he says dryly.
Katzenberg and Whitman attributed the slow start in part to the pandemic. T-Mobile, Quibi’s most important launch partner, could hardly flex its marketing muscle when most stores were closed. The “on the go” users the app was meant to capture were now stuck at home. Of the 40 million newly unemployed, a disproportionate number are the young digital natives Quibi is trying to reach. But plenty of streaming companies have seen the stay-at-home orders as a boon: Instagram Live is surging, and mobile-phone use is up, with shocked iPhone users posting screen-time reports graphing dramatic spikes. It’s easy to imagine users of a new, bite-size video app sitting in bed at night gorging on mouthfuls of fresh content.
Most subscribers have signed on with a 90-day free trial. This month, as that period expires, Quibi will learn how many of those people will stick around once they’re asked to pay. If they don’t, Quibi will be left to reckon with how it miscalculated so badly, and for Katzenberg and Whitman, it could be a deflating capstone to two storied careers.
One of the most striking things about Quibi is how fully and handsomely realized it is. Production values are high, the app is easy to navigate via thumb swipes, and its so-called Turnstyle technology, which lets users flip their phone from vertical to horizontal and back without compromising the viewing experience, is arguably an improvement over Netflix and YouTube’s landscape mode. Its content includes feature-length movies structured in chapters of seven to ten minutes each, such as Most Dangerous Game, a thriller in which Liam Hemsworth’s terminally ill character agrees to be hunted by bored rich guys to provide for the family he’ll leave behind; docuseries like Blackballed, about the saga of Clippers owner Donald Sterling; reality shows; and news programming, which Quibi originally referred to in-house as “Daily Essentials.” The news programs were made with media partners from TMZ (celebrity gossip) to CBS (60 in 6, targeting people for whom 60 Minutes is ten times too long). (Speedrun, a gaming-news report, is one of two Quibi shows produced by New York’s parent company, Vox Media.)
Before Quibi even had a name, Katzenberg was singing the gospel of chapterized stories for your cell phone. “I believe there is going to be an enterprise ten years from now that will be as big as the television business is today,” he told a conference crowd in early 2017. He viewed the success of Dan Brown’s The Da Vinci Code, with its 105 chapters, as validation of the thesis that consumers want entertainment in small chunks. He believed that, despite most shortform video sites’ reliance on user-generated content, every medium has room for a premium offering. And he considered the TV streamers to be playing a different game altogether than what he was envisioning.
The day it launched, the Quibi app rose to No. 3 in Apple’s App Store. By mid-June, it was No. 284.
If anyone in Hollywood could conjure something new purely through force of will, it was Katzenberg, who, though he’s approaching 70, remains a not-so-young man in a hurry. An NYU dropout, he studied gambling for a time in order to run a club in the city, and he learned how to count cards well enough that he was banned from several Las Vegas casinos. He eventually landed a job as Barry Diller’s assistant at Paramount, where the patronizing nickname bestowed on him by Diller and Michael Eisner was “Golden Retriever.”
In 1984, he and Eisner moved to Disney. Katzenberg did little other than work, and he expected others to follow suit. He was known, apocryphally or not, for saying, “If you don’t come in on Saturday, don’t bother coming in on Sunday.” He was also said to run his hand along the hoods of employees’ cars upon arriving at the studio, checking to see who had gotten there only shortly before him. He was famous for booking three breakfasts every morning. “People know that when you sit down with Jeffrey for a meal, you get 30 minutes,” a longtime colleague says. “He’s just a machine.”
Katzenberg’s unyielding drive was instrumental to Disney’s animation renascence in the 1980s and early 1990s. He pushed forward with 1988’s Who Framed Roger Rabbit, which promised to integrate live action and animation in technologically groundbreaking ways, in the face of enormous industry skepticism and a then-unprecedented $70 million budget. The movie ended up grossing $330 million and winning four Oscars. He followed that success with Beauty and the Beast, The Little Mermaid, and The Lion King. Then, in 1994, Eisner passed him over for the No. 2 job at Disney and refused to pay him the large severance guaranteed in his contract. Katzenberg sued Disney, eventually walking away with a $270 million settlement.
When he turned around and co-founded DreamWorks with Steven Spielberg and David Geffen, it was the first new studio built in L.A. in 60 years. There, too, he produced a series of monster hits: Shrek, Kung Fu Panda, How to Train Your Dragon. “When Shrek came out,” Katzenberg says, “there were people that said, ‘Really?’ That kind of satirical take on a classic fairy tale. ‘How dare you?’ There were people who were highly critical of Lion King, Three Men and a Baby — the amount of people who assaulted those films when they came out.”
Not that Katzenberg spent much time dwelling on his accomplishments. Journalist Kim Masters has known him for 30 years and wrote Keys to the Kingdom, which chronicles the Eisner-Katzenberg era at Disney. Once, when Masters was having dinner with Katzenberg, she mentioned that her daughter was performing in an adaptation of Disney’s Beauty and the Beast at her high school: “ ‘Jeffrey, think about it, all around the world, kids are doing stage productions of movies you brought into the world. There’s this enormous cultural impact, and that’s got to feel really good.’ He said, ‘I never think about that. I don’t look backward.’ ”
Inevitably, then, after selling DreamWorks Animation to Comcast-Universal in 2016 for $3.8 billion (and taking home $420 million), Katzenberg wasn’t going to retire to a super-yacht like Geffen. Instead, he formed a holding company called WndrCo that would take stakes in a handful of media firms. It would also birth a new company of its own.
By July 2017, Katzenberg was appearing on the cover of Variety touting something he called NewTV. He knew he needed a business partner, and he saw his opportunity when Whitman announced that November that she was retiring as CEO of Hewlett-Packard Enterprise. For nearly two decades, Whitman had been one of Silicon Valley’s adults in the room, brought in to guide eBay while growing the company from 30 to 15,000 employees and $4 million to $8 billion in revenue. Later she was charged with turning around Hewlett-Packard, then the largest tech company in the world, after it had seen its stock drop 46 percent in the preceding year.
At both places, Whitman made bold moves to mixed effect. At eBay, she acquired PayPal, which was integral to the company’s expansion, but she also led the purchase of Skype for $2.6 billion, an investment on which eBay ultimately took a $1.4 billion write-down. By the time she departed, the company’s growth had plateaued. At HP, she presided over one of the largest corporate breakups in American history, splitting the firm into two companies. Whitman remained head of the new, business-facing HPE, which even after the spinoff struggled with declining revenue.
Katzenberg called Whitman the day she announced her retirement and asked what she was doing. By evening, he was in Palo Alto, pitch deck in hand. She was quickly persuaded by Katzenberg’s vision. “There’s usually a premium version of what a service is,” she tells me. “It often only attracts 5 to 10 percent of the market. Sneakers, bottled water. Water, by the way, is free. People pay for convenience and premium. Ad-supported TV was at its peak when HBO launched.” She was also compelled by mobile-video trends: Average daily viewing minutes had gone from six to nearly 80, and “we think 5G would be an accelerant to that trend,” she adds. “And I want to invest behind trends.” A few weeks later, she agreed to sign on.
Because NewTV’s point was to charge for content, it had to start out by raising an enormous amount of money in order to afford content worth charging for. In August 2018, just five months after Whitman’s arrival, Katzenberg announced that NewTV had raised $1 billion. (It would eventually amass a total of $1.75 billion.) Its biggest investors included Madrone Capital, an investment vehicle for the Walmart Waltons, and Alibaba, the Amazon of China. But the most important investors were those Katzenberg had brought aboard: every major studio, from Disney to Viacom to Comcast-Universal to 21st Century Fox to Sony. “People doubted that we’d ever be able to pull all the entertainment companies into one boat at one time to support the new venture,” he says. “In the 100-year history of Hollywood, that never happened.”
Without their support, NewTV would be locked out from all the best talent, who tend to have exclusive deals with studios, and from intellectual property like Reno 911! and Punk’d (another show Quibi rebooted), both of which are owned by ViacomCBS. Katzenberg was able to make hay of the studios’ involvement, too, as a show of industry support for his start-up, even though the investments were relatively small — “in the $20 million range,” a studio executive says.
From the studios’ perspective, the investment provided schmuck insurance in the event that NewTV took off, and perhaps most important, according to two studio veterans, the deals came with assurances that NewTV would spend an equal amount on services and products provided by the investor. This is known as “round-tripping.” If Disney invested $20 million, NewTV would commit to spending $20 million on content and production supplied by Disney. There was really nothing for the studios to lose. (“Many of them asked that Quibi reciprocate their level of investment,” a Quibi executive says. “Quibi did not agree to that.”)
The investments helped secure a slate of A-list directors and producers for the launch of the app, which was no longer called NewTV. (It turned out — whoops — that there was already a company named NewTV.) The new name was Quibi. Katzenberg had originally wanted to call it Omakase, after the sushi tasting menus he enjoyed at least once a week at Nobu Malibu. “That would have really won over Wisconsin,” a former insider notes. Ultimately, Quibi won the day. “They never asked staff to weigh in on it,” this person says. “People on staff thought it was cringey and would ask, ‘Is it too late to change it?’ Meg loved it.” Though arguably no sillier-sounding than Hulu, Quibi would be roundly mocked by people who thought it sounded like a “quinoa-based doggy snack” or “the cry of an attacking Ewok.”
For filmmakers, though, Katzenberg’s new venture was happy news. The so-called streaming wars had already funneled billions of dollars into new programming: Netflix, with more than 182 million subscribers worldwide, spent $15 billion on original content last year. Amazon Prime Video, with 150 million subscribers, spent $6.5 billion. Apple+ spent $6 billion, and HBO and Hulu spent $2.5 billion each. But creators still worried that the spigot would inevitably shut off, and a buyer was a buyer.
Some creators seemed also to embrace Quibi’s unique proposition. Writer-director Veena Sud, working on her scripted 13-chapter thriller The Stranger, about a female rideshare driver terrorized by an incel-type man she picks up, found herself packing in the cliffhangers to keep people coming back every day and moving the characters through different environments to create a texture that would play cinematically even on a pocket-size screen. “It turned out to be an incredibly fun challenge as a storyteller,” she says, “like running down a soccer field that was half the length I’m used to with 20 additional players.”
Katzenberg has announced other shows that take advantage of a phone’s particularities: Wireless, co-created by Steven Soderbergh, will feature a man stranded in the mountains with a dying cell phone; if you turn your phone vertically, the view switches to the character’s cell-phone screen, and with each episode, he loses one percent of battery power. Katzenberg has said Spielberg wants to make a scary show for Quibi that is watchable only after dark.
From the beginning, observers wondered how the Katzenberg-Whitman partnership would work. They had complementary skills, but each was used to being in charge. Whitman described herself to me as “left-brain analytical” to Katzenberg’s “right-brain storyteller.” As The Wall Street Journal recently reported, two months into Whitman’s tenure, tensions between the two executives had ratcheted so high that she considered quitting unless he changed what she saw as his dictatorial and micromanaging behavior.
When Quibi was preparing to move offices, “they had a huge fight when [the design consultant] took Jeffrey to see the new office without Meg knowing, because the new office was Meg’s purview,” says a person with firsthand knowledge of the company’s inner workings. (A Quibi executive denies that this happened.) Once Quibi had moved into the 49,000-square-foot space, “they carved up North and South Korea, and they drew a DMZ line each doesn’t cross.” Whitman sits on the third floor, Katzenberg on the fourth. “Katzenberg was in the content corner. Meg did everything else.” On occasion, Whitman would have to discourage Katzenberg from reaching out to people in departments she oversaw, with marketing being a particular flashpoint. “It was like, ‘Oh, Mom and Dad are fighting again,’ ” this source adds. (“We’ve formed a strong partnership based on strength and authenticity,” Whitman says. “We’re friends who admire and respect one another.”)
But Quibi’s bigger problems were more conceptual. Who needed Quibi to break things up into “snackable” chunks for them to begin with? As one longtime Hollywood executive told me, “I have a pause button.” Some wondered whether Quibi was a feathered fish and Katzenberg had mistaken an incremental innovation for a grand disruption.
To combat the idea that Quibi would be providing something that already existed, Katzenberg leaned into making Quibi seem different. To emphasize that this wasn’t just TV on your phone, he declared that Quibi wouldn’t even be available on your TV when the app launched. He also heavily hyped Turnstyle, and once Quibi was all in on this phone-only tech, the decision not to prioritize casting to TV was even harder to reconsider. In interviews, Katzenberg would adamantly emphasize Quibi’s novelty.
Some employees within Quibi wondered whether young people would pay for the service. “You never dissented on that point,” recalls one of them. “Their fund-raise was predicated on a plan that showed revenue targets, so they could never unwind that.” Katzenberg says much the same when I ask him why Quibi doesn’t have an ad-supported free offering. “Literally,” he said, “you cannot do the math.”
A bigger question was whether they were doing the math on something that might be worth considerably less than it appeared to be. One media investor suggested the quality of Quibi’s lineup reflected “an adverse selection bias.” In other words, Quibi is getting A-talent’s B-material, or else producers’ desk-drawer scripts, which haven’t been able to attract a more established buyer. “If we have a show that’s going to be a huge hit, you pitch to Netflix, HBO,” says a producer with a project at Quibi. “If it doesn’t get traction, you pitch to Quibi.” Indeed, many of the shows Quibi picked up had been widely shopped elsewhere beforehand.
Jason Blum points out that a lot of excellent scripts still end up in desk drawers. “Every movie I’ve had a hit with was picked over, including Paranormal Activity,” he tells me. Blackballed producer Will Packer says that, although he initially shopped the project widely, Quibi was the most aggressively interested, and he and director Michael Jacobs ultimately found that shortform offered certain advantages: “It wasn’t a story people didn’t know. We wanted to get right to the interesting bits.”
People have wondered why Katzenberg and Whitman, in their late and early 60s, respectively, and not very active on social media, would believe they have uniquely penetrating insight into the unacknowledged desires of young people. When I ask Whitman what TV shows she watches, she responds, “I’m not sure I’d classify myself as an entertainment enthusiast.” But any particular shows she likes? “Grant,” she offered. “On the History Channel. It’s about President Grant.”
Katzenberg is on his phone all the time, but he is also among the moguls of his generation who have their emails printed out (and vertically folded, for some reason) by an assistant. In enthusing about what a show could mean for Quibi, Katzenberg would repeatedly invoke the same handful of musty touchstones — America’s Funniest Home Videos, Siskel and Ebert, and Jane Fonda’s exercise tapes. When Gal Gadot came to the offices and delivered an impassioned speech about wanting to elevate the voices of girls and women, Katzenberg wondered aloud whether she might become the new Jane Fonda and do a workout series for Quibi. (“Apparently, her face fell,” says a person briefed on the meeting.)
At a casting session this year, while watching a tape test for a Daily Essentials host who was a Black man with an Afro, Katzenberg said the man didn’t look “authoritative.” Content executive Shawna Thomas, an Emmy-winning journalist from Vice News and NBC, was used to the political incorrectness endemic to casting conversations, but as a discussion of the candidate’s hair went on and on, she felt increasingly uncomfortable and left the room to avoid becoming visibly upset. That evening, she and Katzenberg had a long phone chat in which she explained why she makes a point of wearing her hair in a natural style on TV — so that, say, a little Black girl watching MSNBC could see someone authoritative who didn’t conform to the predominant white American standard of beauty. Afterward, she felt Katzenberg had understood her. “The discussion was frank, honest, and positive and might not have gone as well at another company,” Thomas says.
Katzenberg and Whitman also point out that they stocked the Quibi offices with young employees who are in the demographic they’re trying to reach. But “there was an incredible lack of knowledge of the audience and dismissiveness of the audience,” another ex-Quibite says. “A thing Jeffrey always says is ‘I’m not a child or mother, but I made movies children and mothers loved. I know millennials better than millennials.’ ” Katzenberg had at times been well served by his intuition, and he remained convinced of its acuity. “I say, ‘Where’s your data?,’ ” Whitman says of their contrasting styles. “He says, ‘There is none. You just have to go with your gut.’ ”
His gut extended to notes on specific scenes in scripted shows, interviews in documentaries, and talent appearances on news shows. Some welcomed them even if they disagreed. “There’s a big difference between getting honest notes from people who are brilliant like Jeffrey and people who aren’t,” Veena Sud says. Others found his opinions annoying and unnecessary — for Daily Essentials, he had to repeatedly be talked out of his conviction that hosts and anchors should appear sitting down, the men wearing ties — or faulted him for an inability to truly listen. “I’m not saying you have to live by data,” an ex-colleague says, “but if 15 people tell you you look tired, lie down.” For all his past successes, Katzenberg’s sureness about his own instincts hasn’t always been justified. At DreamWorks, he had preached the gospel of 3-D, vowing that all future animated movies the studio put out would use the technology. Then a lot of 3-D schlock flooded the market, and a night out at the movies at $20 a ticket proved just too expensive for many families. 3-D wasn’t the future after all.
“That’s a microcosm of the Quibi story,” a producer who has worked with the company says. “ ‘Everyone else is fucking wrong; I’m just going to do it.’ He willed it into being.”
A series of top executives came and went. Janice Min, the former editor of The Hollywood Reporter, oversaw Daily Essentials but left after reportedly clashing with Katzenberg over direction of content. Executive Tim Connelly, under whose leadership Quibi secured $100 million in advertising commitments, also left abruptly. Two weeks after launch, Quibi announced that its creative-marketing lead, Megan Imbres, would be leaving the company as well. “It’s very Trumpian there,” says a person with firsthand knowledge. “Unless you agree with them, you’re a troublemaker. Meg believes she’s a marketing genius; Jeffrey believes he’s a content genius. So you end up in shitty jobs where you’re there to execute their vision, which no one else there believes in.” Some employees joked darkly that Quibi was another Fyre Fest in the making, but those early months were also full of high purpose and enthusiasm. “People made fun of me,” one ex-Quibite tells me. “They said I drank the Kool-Aid. But I actually thought the idea had a lot of promise, and there was a lot of creative energy floating around.”
The amount of hype surrounding Quibi began to feel ominous, as if almost any level of success would feel like failure. “Look how much money Apple, Amazon, YouTube, Netflix, Hulu, and Disney+ bring to the table,” an ex-Quibite says. “We’re not raising $1.75 billion to start a pizza parlor in the East Village. We’re doing it to try to compete for content with some of the world’s biggest streamers. If they’d messaged that, they could have presented themselves as the small guys taking on the big guys. But they allowed expectations to soar to the point where people started thinking they were a Netflix competitor.”
Some of the industry skepticism seemed to have an edge of personal antipathy. Katzenberg was a polarizing figure. He had been a relentless advocate for his projects and turned animators into stars, but some viewed him as a “frame-fucker” (Hollywood’s version of a micromanager) and a philistine. James B. Stewart, in his book DisneyWar, recounts an instance when Katzenberg ordered animators rendering the castle in Beauty and the Beast to “fix the ceiling. Make it French, like Botticelli.” During his DreamWorks years, some fellow moguls found Katzenberg’s work ethic tiresome. “He’s a time suck of unbelievable proportions,” says a longtime colleague. He has thrown some sharp elbows over the years, leading some of his most important relationships to rupture. (He and Geffen no longer speak.) When Comcast-Universal bought DreamWorks, it was on the condition that he leave the company. (“Let’s reiterate,” a former friend says. “Comcast chose to overpay for DreamWorks Animation to not have him there.”)
Blum chalks up the griping to jealousy. Salaried Hollywood executives have no problem with entrepreneurial founders like Elon Musk getting rich, he says, but they see Katzenberg as one of them. “He doesn’t get the founder status, and he’s gotten, a couple times over, the founder pay,” Blum says. “People making $20 million or $25 million a year are like, ‘Fuck it, this guy’s one of us, and he keeps beating me.’ ”
When COVID-19 hit, Katzenberg and Whitman considered delaying Quibi’s launch, but they had 12 months of ads locked in with more than six months’ worth of content banked. And, as Katzenberg says, this was “a marathon and not a sprint.”
Almost immediately, it became clear just how badly Quibi had failed to understand its digital-native audience. In its zeal to control how its content is seen — one of Quibi’s arguments to advertisers is that it’s a “brand-safe environment” — Quibi didn’t allow screenshotting, which makes it harder, or at least less fun, to talk about its shows on social media, the de facto watercooler in an officeless era. If you want to share an image from a Quibi show, you have to use a second phone to take it. When The Golden Arm drew Twitter’s attention, the delight was followed by scorn as people realized Quibi’s screenshotting limitations. Quibi also suffered a security fiasco when journalists reported that its email-verification process sent users’ private data to third-party firms.
And Quibi has had to contend with a lawsuit over its beloved Turnstyle. Filed by Eko, a New York–based interactive-video company that had met with Quibi employees several times, including once with Katzenberg, the suit claims the Turnstyle technology was stolen from Eko. (The Quibi patent lists among its inventors two engineers who were exposed to Eko’s technology, under NDA, when they were at Snapchat.) It was hard to write off as a mere nuisance suit. Eko’s well-connected board included Snap chairman Michael Lynton, and the formidable hedge fund Elliott Management partnered with Eko to pay for the litigation.
As of early July, over 5 million phones had downloaded the Quibi app. Of those, 1.5 million had registered to use it, and this was with Quibi offering a three-month free trial and doing saturation marketing. (When it paused the marketing during the Black Lives Matter protests, Quibi’s App Store ranking fell to No. 1,477.) In light of its disappointing user numbers, Quibi’s advertisers have reportedly asked to renegotiate their deals. The company was forced to go into capital-conservation mode. Executives took a 10 percent pay cut.
Some of Quibi’s own ads in the run-up to launch seemed ego driven. Why was an app aimed at 25-to-35-year-olds being advertised on the Oscars broadcast, which has a median viewer age north of 56? Quibi’s marketing pushed the platform rather than the shows on it. “He was so invested in the idea of showing that the critics were wrong,” a former employee says of Katzenberg. “If they’d made the marketing about Most Dangerous Game and Chrissy’s Court, they could be crowing about what hits they are.” In market research following its Oscars and Super Bowl ads, 70 percent of respondents said they thought Quibi was a food-delivery service, according to two people separately briefed on the research. (A Quibi executive denies this account.)
Quibi has recently shown an ability to laugh at itself, linking to a favorable review of Most Dangerous Game and tweeting, “See guys we have a good show.” But not all of its damage-control efforts have been successful. An interview with the New York Times went terribly, with Katzenberg quoted as saying, “I attribute everything that has gone wrong to coronavirus.” (A spokesperson for Quibi who was present for the interview maintains Katzenberg was clearly joking.) After press leaks, Quibi instructed parting employees to say good-bye to colleagues one on one rather than by mass email.
Katzenberg and Whitman have tried to put the best face on things. “No question, we’ve launched at a difficult time,” Whitman told me in May. Quibi’s business plan had posited three scenarios — one high, one medium, one low — and, she says, “I’d say we’re tacking to the base case.” But she notes that “we’ve only been in business 50 days.”
When I spoke to Katzenberg around the same time, I asked for his assessment of Quibi’s launch to date. “I would say things are going really well,” he said. (“Yeah, he’s disappointed,” his friend Jim Gianopulos, the head of Paramount, tells me. “But he ignores the possibility of failure in the pursuit of success. That’s who he is.”)
Whitman tells me investors aren’t freaking out: “Interestingly enough, they’re all pretty calm. They’re all in businesses that have been affected by covid. They know that we’re a start-up.” And Quibi is already starting to adapt. A marketing pivot began in late June, focused on pushing the two new shows launching each week. With pandemic lockdowns causing people to spend more time watching TV, the company has hustled to reengineer the app so it’s castable to one’s television. Quibi is also working to make screenshotting possible.
Meanwhile, the 90-day free trials will begin expiring this month. The industry conversion rate from a free trial to a paid subscription hovers below 33 percent. According to research firm Parks Associates, if that holds true for Quibi, it could mean less than 500,000 people would be watching a network that spent hundreds of millions of dollars on brand-new premium content. “We don’t know quite what to expect,” Whitman tells me in late June. Quibi still has a lot of money in the bank — an estimated $750 million by the end of this year’s third quarter — and Katzenberg has said its runway will take it through late 2021. (The Wall Street Journal reported that Quibi will seek to raise an additional $200 million before the end of next year.)
Shortly after launch, Quibi canceled Frat Boy Genius, the acerbic show about Snapchat’s Evan Spiegel, which at one time had represented everything bright about Quibi’s future. A Quibi executive says it was canceled because it was “not a strong enough script.” There’s one moment in it, though, that seems particularly apt: Spiegel’s Stanford mentor tells him about the Arch Deluxe, the hamburger introduced by McDonald’s in 1996 that was more expensive than its other burgers. Convinced that a premium product would appeal to an older demographic of “urban sophisticates,” McDonald’s spent more than $150 million on ad campaigns, an enormous sum at the time. As it turned out, the chain’s existing customers liked McDonald’s for its cheapness, and less-price-sensitive noncustomers preferred to eat somewhere other than a fast-food joint. Four years later, amid anemic demand, the Arch Deluxe was discontinued.
In Frat Boy Genius, Spiegel’s mentor offers the parable of the hamburger-that-wasn’t as a cautionary tale, calling it “one of the most expensive product flops in history.” Katzenberg had surely started to glimpse the potential optics if the platform airing Frat Boy Genius began to follow a trajectory less like Snapchat’s and more like that of the Arch Deluxe.
*This article appears in the July 6, 2020, issue of New York Magazine. Subscribe Now!
