Quibi CEO Meg Whitman breaks down the revenue model for the mobile-only video service and explains her pitch to advertisers
The company will sell subscriptions, as well as seconds-long pre-roll ads and branded-content placements.
Quibi will also have an area for branded content within its "daily essentials" section, which includes daily episodes of news and informational series. The ads in the branded-content area will stand alone, and could be around two- to four-minutes long, Whitman said. She said she expects to know which subscription type consumers are more drawn to within two to three months of launch.70% of its 82 million viewersAnalysts at Bernstein estimated about 60% of the $2.9 billion Hulu generated in revenue during the second half of 2019 came from subscriptions, and 36% came from advertising. The rest came from licensing originals to distributors outside of the US. Hulu sells both on-demand and live-TV subscriptions.
"They also believe that the next big revolution in entertainment really should be on the mobile phone, so the idea about creating and commissioning shows uniquely designed for mobile is super interesting to them," Whitman said of advertisers. While all of the programming on Quibi will be designed specifically for the platform, the company won't own the rights to the content.
"There are two ways to make money in this service: one is by owning the content, and one is by owning the platform," Whitman said. "We've made a decision that it's best for an ecosystem, for the creators, to own their own content and we will own the platform profit pool. This was a very strategic decision."
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