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Where did Quibi go wrong: What can entrepreneurs learn from Netflix’s rival rough start
By SmartBranding Team access_time 8 min read

Since the story of Quibi has hit the media, many brands and small businesses are rethinking their business strategies. Quibi appeared on the market as a streaming platform based on subscriptions like Netflix, HBO, and other similar brands. The idea behind the app is streaming movies and TV shows in short 7-10 minute videos so people can watch their favorite shows when waiting in lines, taking short breaks, etc. They have been struggling from the very beginning. According to VanityFair, by September, the Jeffrey Katzenberg co-creation will have spent nearly $1 billion of the $1.75 billion it raised in investor money and they will need to raise an additional $200 million before the end of June 2021.

You can’t help but wonder where did things go wrong with this company? Quibi and Netflix are parts of the same industry, so what made such a difference between them?

While Quibi was suffering financial losses, despite the Covid-19 situation, Netflix made 6.15 billion for the second quarter of the year.

Jeffrey Katzenberg, the founder of Quibi, blamed bad results on coronavirus. This definitely was a bad time to launch something that should be watched in a busy life, while the whole world is staying home quarantined and has time to watch whole movies and series. But it appears that there are many other problems holding Quibi back from the expected success.

First of all, it looks like they made a complete mistake when targeting their audience. Quibi’s target audience is 18-34-year-olds while their content doesn’t seem to reflect that. It was suggested to them to contact and stream young famous YouTubers but that idea was turned down. They didn’t take the time to analyze and learn what 18-34-year-olds want to watch. That’s why they went with traditional stars instead of digital ones, who are taking over the scene over the last few years. They’re streaming shows that are for an older audience. On the other hand, what did Netflix do? They target their shows to the 18-49 age range while providing content for both, younger and older audiences. What we can learn from this is that brands should know their customers, their audience, and adjust their content and presentation accordingly.

An important part of the marketing strategy in the internet era is sharable content. Quibi initially blocked from sharing its content on social media platforms and viral media, as well as locked down attempts to take screenshots or even in-phone video capture. This significantly reduces the flow of traffic from and to their app, as well as it slows down building brand awareness. Netflix promotes its own content on Social Media by posting videos to Facebook with mini trailers of their releases, they engage with the audience on social platforms, make polls, respond to comments, make calls to action. All of that leads to more shares and content going viral, leading more traffic to the Netflix website. And they made sure that you stay there once you arrive by producing great content adjusted to their target audience’s needs.

The Viewing Platform was one of the first problems the company faced after the release. People like watching videos on their phones, but that doesn’t mean that they want to watch exclusively on their phones. You can now watch Quibi shows on a TV using Apple’s AirPlay. One of the good things Quibi did while streaming was only available on the phone, is choosing a turnstyle tech – different perspective of a scene whether the phone screen is oriented vertically or horizontally, both without black bars on the sides. On the other hand, Netflix has apps, tv options, computer options to suit their customer’s needs with one recognizable and easy to use interface.

Another big distinction between Netflix and Quibi is the cultural aspect. Netflix built a brand around the social habit of spending free time. And now, when you think of spending your spare time, watching a movie or a TV show, you think of Netflix instantly. Quibi’s attempted to implement the app in a busy daily life. The Coronavirus situation is one of the problems that stopped Quibi from creating a habit around its brand. Covid-19 slowed down life, made people spend time at home, almost completely removing the concept of busy life standing behind the idea of the app. When it comes to watching short 10min videos, consumers would rather watch TikTok or YouTube videos. Besides, those two platforms are free and more appealing to an 18-34 years old target audience.

“Katzenberg is not a fan of comparisons to TikTok, but Quibi does sound like a more polished, Hollywoodized, and expanded version of that app starring prominent names.”, Jack Giroux, Staff Writer at Grit Daily.

People prefer to watch the whole movie or TV show episode in one sitting instead of chopped parts. In busy, on the run life, they will most likely forget what they watched while taking a bus. And they should continue that same episode later on a lunch break. It’s just not very practical and convenient. So the whole cultural aspect of the app doesn’t hold up much. And what do you think about when you hear Netflix? “Netflix and chill”, of course. It’s because it became a socially accepted form of relaxation, spending free time, date nights, and family time. The Netflix brand is wrapped around this cultural concept. Habits are created over time and Quibi just didn’t succeed in making its brand part of daily life, a necessity, nor a cultural concept.

When it comes to the names of these brands, there are some interesting facts. Quibi’s current name wasn’t the founder’s first choice. The brand name was supposed to be “Omakase”, which means high-quality sushi. But in the end, they hired Siegel+Gale, which helped come up with the name Quibi— short for “quick bites.” Although Quibi might be confusing to pronounce and the meaning is not obvious, it’s still a much better choice than “Omakase”. Not to mention some branding horror stories with cultural appropriation, like the one with Kim Kardashian and Kimono.

Netflix’s name is also a combination of two words. The “Net” is derived from the word Internet and “Flix” is a shortened version of the word flicks – a synonym for a movie. Easy to remember and pronounce, Netflix’s name was a great choice. Netflix owns 11,316 domains as part of their domain strategy. Founder Mark Randolph shares in his book “That will never work” that he owned the domain name and that was used it as a placeholder for Netflix before they came up with the final brand name. They also considered, but it was too expensive for a startup. Probably just as well given how the idea evolved from renting movies on DVD to streaming online.

Both Quibi and Netflix have less than 8 letter brand names and own their exact brand match domain names. Their main domains have .com extension, but they also have names in other extensions, possible typos, product, and promotional campaign names.

Price is rarely a deal-breaker if a strong brand stands behind it. But if the brand is still not formed well, the price may determine the course of action for a customer. With Netflix, you get what you pay for. Diverse viewing platforms, no commercials, content adjusted to what the audience wants to see, and easy to use interface for great consumer experience. Quibi hit the market as a premium offering charging $4.99 a month, with viewers still having to put up with ads. The ad-free plan costs $7.99 a month. This is automatically making you think, decide, make plans, while with Netflix you just need to decide whether to subscribe or not. Simply as that, no overthinking which plan to choose.

“Beyond any publicity being swallowed whole by politics, a pandemic, and a national protest for social change, the core idea behind Quibi may have been a misread of consumer interests.” Scott Mendelson |Forbes

Quibi is not giving up though. They are still trying to improve, spread the platform to other media, and expect that results will come in time. It is true that Netflix didn’t achieve where they are now in one night, but from this point, analytics are not really working in Quibi’s favor.

So, what can startups learn from Quibi’s mistakes and Netflix’s impeccable strategy? Building a brand is much more than investing money. It’s knowing your audience, building a tribe around your brand, implementing your brand into cultural norms, and keeping up with changes on the market as they occur.

Planning and researching the market and target audience ahead is very important for any business. A key step is reaching a consistency between customer’s needs and provided content. Consumers need to see the brand as the solution, as help, and as something that makes their life easier and better. Building a brand is not an easy job, but if done right it pays off in the long term.