After rocky start, Quibi must re-focus on trial conversions

by Steve Nason | May. 8, 2020

Short-form smartphone-only SVOD service Quibi launched on April 6th with a limited-time extended 90-day trial and introductory pricing at $4.99 for the ad-supported tier and $7.99 for an ad-free tier. The early days of the service have been a mix of good and bad news.

Quibi certainly picked an interesting time to launch a mobile-only subscription OTT service. As consumers shelter-in-place, their preference for smart TVs and other home-based streaming video devices such as streaming media players and game consoles will be stronger than ever. Some users felt shackled by the mobile-only nature of the service during a time of sheltering-in-place. In response, Quibi will add a casting feature for some users so content can be streamed via a Smart TV. This type of short-sighted strategic planning will not serve them well as they try to build up their subscriber base.

Additionally, Quibi is facing a legal challenge to some of its core technology, discovered a leak of personal user data to third-parties, and has suffered negative press from a series of high-profile personnel departures.

On the positive side, Quibi’s initial content offering of shorts is impressive from both a production and numbers perspective. Through its first two weeks in market, the service reported more than 2.7 million app downloads. This figure is an increase of more than 1 million from the previous week. Moreover, the service has entered into some high-profile partnerships with T-Mobile and Bell Media to increase engagement outside of their regular marketing channels.

Ultimately, Quibi has ample opportunity during this exceptional time to engage consumers and expose them to the rather unique content format and production enhancements of the service. The unorthodox extended 90-day trial will give users plenty of time to become familiar with the content and features. However – converting trial users to paid users is challenging, and churn even among paid users is incredibly high. Parks Associates data shows that, on average, 35% of OTT services’ subscriber base cancel annually. Now that it’s service launch is behind it, Quibi’s top strategic focus must be converting trials to paying subscriptions after the 90 days is up.

Parks Associates’ 360 Deep Dive: Churn, Retention, and Lifetime Value for OTT Video evaluates OTT service churn and quantifies the impact of various retention strategies for OTT service subscribers. Additionally, Parks Associates is tracking the impact of the COVID-19 crisis on the video services space. 

Results from Parks Associates’ March 2020 survey are available in COVID-19: Impact on Consumer Behavior and Spending.

Results from Parks Associates May 2020 survey will dive deeper into consumer engagement with pay-TV and OTT video services, including new subscriptions to and cancellations of leading services, available in the forthcoming COVID-19: Impact on Communications and Entertainment .

Steve Nason, Research Director, Parks Associates
Steve is a research director at Parks Associates, specializing in entertainment content and services. He brings over fifteen years experience in a variety of market research and marketing strategy roles including several in the emerging technology and media space.

Tags: COVID-19, mobile, OTT

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