Even in the best of times, Katzenberg and Meg Whitman's $2? billion mobile video platform was a high-stakes gamble. Now, with the coronavirus pandemic turning the country upside down, they are about to find out whether the millions of potential users under quarantine are a subscriber-boosting blessing or a platform-derailing curse.
They’re converting garages, dressing home offices like sets, even transforming their living rooms with stage lighting. The hosts of two dozen Quibi news shows are doing everything they can to ensure that they will be ready when Jeffrey Katzenberg and Meg Whitman launch their brazen $2 billion bet on the future of mobile entertainment April 6.
The coronavirus pandemic has upended production on the slate of current events-driven shows, dubbed Daily Essentials, that Quibi is relying on for its debut. So producers are finding creative ways to proceed with filming. Tim Kash, who will host music show Pop5, has moved a scaled-down set into his garage, and Jimmy Mondal, the face of gaming show Speedrun who is now shooting from his living room, has been watching YouTube makeup tutorials so he can handle his own touch-ups. They’re all rushing to get the process in place to meet the deadline to start trial runs one week ahead of launch.
"On the majority of our shows, our partners have been very entrepreneurial," says Katzenberg. "And, you know, they’re delivering." So far, he’s expecting the premieres of only two shows to be delayed, including Hot Off the Mic, which relies on recent footage of comedy club sets, and the 60 Minutes-inspired 60 in 6, which is on hold after an outbreak inside CBS News.
The final days before launch would be a frenzied period for any startup, but the unprecedented global shutdown brought about by the coronavirus — which at press time had infected more than 52,000 people in the U.S. and killed more than 18,000 worldwide — has added a new level of uncertainty to Quibi’s already high-stakes debut.
The company’s 265 employees transitioned to work-from-home days filled with Zoom conference calls after the March 16 closure of its Hollywood headquarters. Meanwhile, Katzenberg and Whitman are still working out details on what to do instead of the star-studded party they had planned (now canceled, along with virtually all L.A. gatherings) for the eve of Quibi’s launch. Alternate options, like bringing talent to Quibi’s offices for individual shoots, were quickly called off as the health risk mounted. Though nothing has been finalized, the current plan is to conduct a virtual press junket and then unleash social media missives from Quibi’s talent partners. "The bad news is we had to cancel the party," says Katzenberg. "The good news is we have 200 talent getting on social media to talk about what they’ve made for us."
In spite of it all, Whitman insists there’s nothing stopping Quibi from moving forward with its rollout as planned. "We have every confidence we’re going to be able to launch," she says, calling from the West Hollywood condo where she has set up her home office. "We have the right content to launch, the technology is ready, our messaging has been out in the market. We’re ready to go."
Even before the world (and Hollywood) went topsy-turvy, Quibi’s launch was a favorite topic of conversation at power lunches. Insiders, many of whom have projects with the streamer, quietly questioned whether it can possibly work. After all, Quibi is playing in a decidedly different space than the legacy media conglomerates and the tech giants waging a multibillion-dollar war for people’s attention (and wallets) with tentpole IP like Disney+’s The Mandalorian and beloved classics like Friends (for AT&T’s forthcoming HBO Max) and The Office (NBCU’s Peacock). For $5 a month with ads, or $8 without, Quibi (short for "quick bites") will offer a mobile-only mix of serialized scripted stories, reality shows and news-driven fare — all delivered in installments shorter than 10 minutes.
Though mobile video consumption is on the rise — the average time spent per day is expected to grow to 44 minutes by 2021, per eMarketer no one has proved that consumers, especially those in Quibi’s target demo of 25- to 35-year-olds, will pay for such programming when they can watch YouTube and Twitch for free. And Verizon already tried to lure viewers to a free product, go90, that quickly went bust despite a billion-dollar investment. "A lot of these mobile-only streaming services haven’t been successful," says eMarketer media analyst Ross Benes, making the case that many sources have made to THR privately but few will say publicly. "How many of these streaming services in the graveyard do you need before you stop trying to revive an idea?"
Katzenberg argues that no one has really tried, at least not with the type of expensive, creative-driven projects that Quibi has lined up. The company boasts a launch slate of 50 shows, which THR has sampled, including the unflinchingly dark thriller Survive, starring Sophie Turner as a tortured plane crash survivor; the broadcast-style unscripted series Thanks a Million, from executive producer Jennifer Lopez, in which celebrities give back to those who helped them on their path to success; and the HGTV spoof Flipped, about a down-on-their-luck couple (Will Forte and Kaitlin Olson) who get more than they bargained for with their new fixer-upper. Rounding them out are the Liam Hemsworth drama Most Dangerous Game, Chrissy Teigen-as-judge series Chrissy’s Court and a Punk’d reboot. In its first year alone, it plans to release more than 175 original shows. Everyone from Jason Blum to Antoine Fuqua to Catherine Hardwicke has signed on.
Still, there’s no clear model for how consumers will respond to an app devoted to shortform episodic programming meant to be viewed during breaks in the day. And despite a $500 million year-one marketing campaign that kicked off in earnest with a Super Bowl commercial, general awareness of Quibi is low, a THR/Morning Consult poll finds. Of 2,200 nationally representative adults surveyed March 19-21, 68 percent said they had heard nothing at all about Quibi and just 5 percent said they’d heard a lot. But Katzenberg is confident that Quibi’s social media launch strategy will change all that, declaring, "I’m extremely confident that you will have to be on an isolated island, in a cave under a rock, to not know that Quibi is coming."
On top of it all, Katzenberg and Whitman are now barreling toward launch day without the slightest clue what the world will look like when they get there.
If the coronavirus threat continues through the spring and even early summer, Americans’ self-isolation could give Quibi a captive audience primed to take advantage of its lengthy 90-day free trial. "If you can’t go to school and you can’t go to work, odds are you’ve got more time on your hands than ever before," suggests LightShed Partners media analyst Rich Greenfield, who is generally optimistic about the service’s chances of catching on with consumers. "It bodes well for a mobile video launch." But Quibi is a product designed to be viewed on the go (and only available on a mobile device). Says Needham & Co. entertainment analyst Laura Martin, "Their value proposition just went down in a world where everyone’s quarantined in their home with their television and trying to fill five hours."
Even Whitman admits there are a lot of unknowns. "I don’t think we know how people will respond," she says. "It depends on what people are doing at home, how many people are at home. This situation is different every day." Katzenberg is more sanguine: "All of us now have as many in-between times as we had before. They’re just different."
In the three-act play of Katzenberg’s career, Quibi is the climax. He’d been kicking around the idea for a mobile video venture for years when, after he sold DreamWorks Animation to NBCUniversal for $3.8 billion in 2016, he finally found his opportunity. A year later, Whitman had just announced she was stepping down as CEO of Hewlett-Packard when she got a call from her old friend. "He said, 'What are you doing?'" Whitman says, recalling that she answered by listing all the things she would do with her newfound free time. "And he goes, ‘No, what are you doing tonight for dinner?'"
So Katzenberg flew to Silicon Valley and, during a three-hour meal, persuaded the veteran tech executive and 2010 Republican nominee for California governor to move to Los Angeles to help him construct what eventually would become Quibi. "I’ve built things, and I’ve fixed really big companies. In the end, it’s a bit more fun to build," she says.
With more than 80 years of work experience between them, Katzenberg, 69, and Whitman, 63, have grown fond of calling themselves “the old dogs” leading Quibi, which has an average employee age of 30. But these old dogs are the only two people who could have made an idea as ambitious as Quibi happen.
Early on, Katzenberg said he would need $2 billion in backing to make Quibi a reality. He and Whitman didn’t quite get there — they’ve raised a total of $1.75 billion across two funding rounds from backers including Madrone Capital and Alibaba — but they did something arguably more impressive. They lined up small investments from every major studio in Hollywood — Disney and Warner Bros. among them — and got them all to agree to produce programming for the service. The shortform video industry, still largely derided as low-quality and home-produced YouTube videos, had never seen that level of investment from the entertainment industry. "That was the hardest thing we did," Katzenberg says. "It wasn’t about the money. The essential thing in having them as our partners was the access to their showrunning talent and their IP."
With the studios’ buy-in, Katzenberg focused on assembling a roster of talent that would woo subscribers. For creators, there were questions about what exactly Quibi would amount to. But the money was good — Quibi is spending more than $100,000 a minute on some of its top-shelf shows — and it was offering unusual licensing deals where, after two years, studios could repackage the 10-minute episodes into movies and take them to market; and, after seven years, they would regain the full rights to the project.
Plus, Katzenberg was happily buying projects that had been gathering dust for years. That was the case with the Fuqua-produced drama #FreeRayshawn, which the filmmaker had been trying to get made into a movie. "The script we had wasn’t written for shortform," says Fuqua, "so I had to go back and rewrite it with the writer and work with the director. It had a strong impact on how you approach the story. But it’s worth the risk and challenge that comes with it." Nick Santora, writer and executive producer on two Quibi shows — Most Dangerous Game and the Kiefer Sutherland thriller The Fugitive — was impressed by how quickly Quibi moved to make his shows. "Jeffrey Katzenberg is not a guy to sit on his hands," he says. "If he wants it done, he’s going to support you so it can get done."
Katzenberg himself is often cited as Quibi’s biggest draw. "Jeffrey’s relationships with everybody in town allowed him to get a lot of traction very quickly," says David Freeman, co-head of CAA’s digital media group. "That was crucial because it took a little bit of time to get everybody to understand what Quibi was."
By all accounts, the mogul has approached Quibi’s startup period with the same zeal as he has his whole career, from his days as Barry Diller’s assistant at Paramount to his turnaround of Disney’s box office during the ’80s. But his hard-driving management style (he’s known to call Quibi senior management meetings on Sundays) has ruffled some feathers, and several high-profile executives already have left, including former DC Entertainment president Diane Nelson, onetime Hulu dealmaker Tim Connolly and Janice Min, former co-president and chief creative officer at THR.
"I have a bottomless well of the need to win and a thirst for it," Katzenberg concedes, "but everybody here knows that. They came here knowing that."
While Katzenberg has been busy building Quibi’s content slate, Whitman has been focused on developing its operations, striking a technology partnership with Google and booking $150 million in advertising commitments from brands like Procter & Gamble, Walmart and PepsiCo. She also negotiated a distribution partnership with T-Mobile that will see Quibi bundled along with some wireless plans and subs offered early access to certain programming. It’s a deal that Greenfield suggests could give Quibi its biggest advantage in the race to acquire subs. The carrier, which will have 100 million customers following the finalization of its deal to acquire Sprint, could help boost Quibi to 10 million subs in its first year, he forecasts, though he notes, "Ultimately, for this to really work, they need tens of millions of subscribers over time. They’re playing for a lot more than 5 or 6 million subscribers."
Whitman recently came under fire after The Information tech news site reported that, during a company all-hands, she likened the journalist-source relationship to that of sexual predators who groom their subjects. She since has issued a public mea culpa. "I felt really badly about it," she says. "It was a mistake."
Though Katzenberg and Whitman’s differing styles have led to whispers that they are on the outs, Whitman insists she has no plans to leave. "Jeffrey and I get along great," she responds. "Yeah, there are times when we get into arguments, but that’s because we come at things so differently."
Adds Katzenberg: "What we have come to value and appreciate in one another is that we are opposites. But let me be really clear, there would be no Quibi without Meg Whitman. Her contributions to this place will never, ever get the credit that she absolutely deserves."
For years, Katzenberg woke at 5 a.m. and worked out for two hours before holding back-to-back breakfast meetings. Lately, he’s been setting his alarm for 3:30 a.m. to watch test footage from Quibi’s Daily Essentials — which will provide regular updates on everything from news to sports to pop culture — and deliver notes before the shows’ largely New York-based creative teams start their workday.
In the absence of library content, those shows — which make up more than a third of Quibi’s launch programming — will be central to keeping viewers coming back day after day, which is why the company has gone out of its way to make sure production can continue in the midst of coronavirus-related shutdowns. When possible, producers are sending cameras, lighting and set backdrops directly to talent so they can shoot at home. Figure skater Adam Rippon, whose This Day in Useless Celebrity History is set to debut a few weeks after Quibi’s launch, took to Instagram on March 21 to show off the equipment that had just been “dropped off at the front door,” explaining that he’d been taught how to set it up over Apple’s FaceTime.
Despite the challenges to the Daily Essentials productions, Quibi top brass says that most of its launch slate won’t be impacted since production on its serialized shows (called Movies in Chapters) and unscripted series has largely been completed. Jim Toth, the former CAA agent who joined Quibi in 2019 to head content acquisition and talent, estimates that the company has enough programming lined up that it can keep releasing new shows through its first six months. “We’re confident in our ability to bring subscribers new content on a weekly basis well into fall, actually,” he says. Even shows planned for post-launch premieres, like Murder, She Wrote spoof Mapleworth Murders from former Saturday Night Live writer Paula Pell, are largely in the can and ready to be released. “Especially these days, it’s nice to know that we can make people laugh,” Pell says.
And, like most networks in town, Quibi development execs continue to hear pitches and are even, according to sources, quietly encouraging some freshman shows to prepare scripts for second seasons — all so production can quickly resume once Hollywood returns to normal.
Quibi's tech team has had a much easier time making adjustments. Whitman's daily 90-minute "war room" meeting, where they run through final adjustments to the app, went virtual a week before Quibi made work-from-home mandatory. "Everyone's getting better at Zoom," she says with a chuckle. Because Quibi was developed on the cloud, she adds, there are no concerns about launching it remotely: "If we had a data center like I did at eBay 20 years ago, it might be a different thing." (The company's Turnstyle technology that allows people to view videos in either horizontal or vertical orientation is the subject of a patent infringement lawsuit that Quibi is calling “a campaign of threats and harassment.”)
Even Quibi’s freshly deposited funding — $750 million from undisclosed backers — and advertising commitments are secure, she says, despite the recent stock market slide and ensuing financial panic.
Despite all their big talk over the past two years about what they’ve been building, Katzenberg and Whitman are muted about their expectations for Quibi. “I would be very disappointed if somebody misinterpreted confidence as arrogance because I don’t have any of that,” Katzenberg says. “I actually have a great deal of humility about [the fact that] we are about to be schooled by our customers. I am thrilled that, in real time, we will actually be able to see with extraordinary precision what they want to watch and the way in which they want to watch it.”
One of the reasons Katzenberg and Whitman are eager to release Quibi is so that they can start to receive data about how people are using the app. They've been holding tastemaker screenings around Hollywood and have done some market testing, but it's not the same as a real-time feedback from real users. "I'd like to get the app out in the wild," she explains. "I'd like real customers to experience the content. I just want to see how they react, what they watch, what they think about it."
Though the pair decline to share how many subs they are targeting in Quibi's first year, Disney+ — with its 10 million sign-ups in 24 hours — this won't be. "Hulu, Showtime, HBO, Netflix, none of them has ever behaved that way, and we won't likely either," Katzenberg says. "We're not going to be a rocket ship."
Still, Whitman says the company has the financial runway to reach its goals, regardless of how long it takes for daily life to return to normal: “We’ve got plenty of time. We’re good.”
At Quibi’s headquarters on the second Thursday in March, just a few days before the company will shutter its offices to wait out the pandemic, Katzenberg jumps out of the seat he’s been occupying inside a glass-walled conference room and walks to the whiteboard on the opposite side of the room. He has a point he wants to make: “If you want to be unique, and you want to be original, those things equal risky,” he says as he scrawls the words in blue marker.
He’s no novice. He’s heard the whispers about Quibi’s challenges, and he’s unfazed. "I’m not fearful," he says as an unseasonable L.A. rainstorm pounds the window behind him. "Failure is something that could happen. It’s not going to, but it could."
This story first appeared in the March 26 issue of The Hollywood Reporter magazine. Click here to subscribe.