Insights: How To Avoid Quibi’s Gigantic Bust-Out In Your Own Startup

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It’s easy to snark about Quibi, which just became one of the biggest and quickest digital-media disasters ever. But let’s do it anyway.

Plenty of folks on Twitter, Facebook, LinkedIn, and elsewhere piled on this week when founder Jeffrey Katzenberg and CEO Meg Whitman announced that the shortform video company would wind down operations, with an official shutdown set for Dec. 1.

Many comments were along the lines of helpful, if rather pugnacious, suggestions on the alternative ways one could spend the $1.75 billion that Quibi raised in its short existence. While that subject is certainly fertile ground, this debacle is also providing genuine opportunities for businesses to learn about successfully navigating obstacles, often by doing the opposite of whatever Quibi did.

So, rather than mourn (or mock) Quibi’s passing, let’s celebrate the chance to learn lessons that other companies can use to avoid stumbling into the same quagmire.

Lessons to be learned from Quibi’s demise

  • Too Much Money? It’s just possible that Quibi raised too much, rather than not enough, money to become successful (Magic Leap, which raised $2.2 billion, may have had the same problem). The fundraising attracted a lot of news coverage, plus interest from Hollywood producers looking for someone to finance pet projects. But time spent fundraising and managing investors is time not spent dealing with other crucial challenges, like making your shows distinctive, or creating the best possible user experience. By contrast, just look at the thousands of online creators who built far bigger audiences than Quibi despite single-digit team rosters and production budgets. What did those creators have instead of money? Lots of creativity, of course, but also an understanding of their particular medium’s needs and strengths, and a boundless willingness to learn and evolve. I’ve long said that art lives in the limits it faces. Quibi’s money effaced any understanding of its medium or any possibility of evolution in its development.
  • (Relevant) Content Is King. In line with “understanding and evolution,” as one young marketing guru told me when asked about Quibi’s demise, “You can have all the money in the world, but it’s content, content, content, content.” He’s using Quibi as an object lesson going forward. But it’s not just content, it’s content relevant to the specific platform. Quibi’s big content pitch was feature-length “lighthouse” projects broken up into 10 to 15 “chapters” that would unspool over days or weeks on mobile devices. There was literally no evidence suggesting consumers wanted the mobile-only, non-bingeable experience Quibi was offering. Effectively, Quibi was trying to create a new way to consume content, not just a new platform to distribute that content.
  • No Sharing Here? Yes, organic reach is dead, as YouTube, Facebook, and Instagram try to extract more ad dollars rather than making posts go viral. But that doesn’t mean your media platform should make it impossible for customers to screenshot and share your shows on social, which is what Quibi inexplicably did. Copyright concerns are understandable, but Katzenberg’s last-generation Hollywood approach to social sharing was a needless self-inflicted wound. Anyone doing media in this generation understands that social conversations are exactly what you should encourage and enable. In an era of nearly endless programming choices, nobody can run enough ads to break through without help from their friends. Help your superfans do what they do.

What to do when the black swan roosts

  • Circumstances Change; Can You? Katzenberg blamed Quibi’s problems on “bad timing” from the pandemic and lockdown, which arrived just as the app launched in April. That may be a comforting narrative for Katzenberg and, ahem, at least one other prominent leader suffering a reversal of fortune in recent days. But truth is, Quibi was badly positioned to start with, then failed to adapt when circumstances changed, which happens a lot. Not only was Quibi built on an unproven usage pattern, the company didn’t give users any other way to watch its content. When, suddenly, millions of possible customers were stuck at home all day, with lots more time and access to bigger screens, they couldn’t watch Quibi (it took months to add the ability to “cast” shows onto TV screens, which should have been there from the start). This era’s most basic media mantra is that consumers want to watch what they want, when they want, and where they want. Katzenberg, again, took a very old-media approach. When life changed, Quibi wasn’t ready. But stuff happens. Be ready for it.
  • Build An Asset. For all Katzenberg’s old-media missteps, he also declined to do the one smart thing every Hollywood studio has done for a century: build a library. Quibi had more than 100 shows, but didn’t own any of them. Producers got excited because Quibi deals not only paid well, but let them get back rights to their projects within two to seven years. That certainly encouraged big-name talent to get involved. But when Quibi hit the skids, and Katzenberg went looking for buyers, there was nothing to sell. And no surprise, there were no buyers either.
  • Franchises Are Bigger Than Stars. Quibi featured shows from lots of prominent Hollywood talent, both in front of and behind the camera. But again, that’s an old-school approach to programming. Other than perhaps Tom Cruise, Dwayne Johnson, and Will Smith, few Hollywood stars in recent years could deliver a big opening weekend for a movie. Now we don’t even have opening weekends. But look at what Hollywood pivoted to: billion-dollar blockbusters built around durable franchises and few big-name stars. And in streaming, the biggest hit to come from any new service the past year was The Mandalorian on Disney+.  Pedro Pascal stars, but you wouldn’t know it from the show; his face is always covered because his character’s lore makes it a mortal sin to remove his helmet. Disney built the show around a beloved minor character in the Star Wars universe, and fans turned out by the millions, rocketing the service’s fortunes to a galaxy far, far away. By contrast, Katzenberg and Whitman took a page out of the 1995 Hollywood strategy guide. They focused on recruiting talent rather than known properties, in hopes the stars would draw viewership.  Perhaps it would have been smarter to license franchise spinoffs from some of Katzenberg’s Hollywood pals instead.

Getting dazzled by fancy technology

  • Don’t Be Distracted By Whiz-Bang Tech. Another of Quibi’s big pitches to advertisers, users, and journalists was its Turnstyle technology, which allowed viewers to watch in either horizontal or vertical aspect. The hack was nifty enough, but it came with costs. Creators had to effectively create two different projects, framed for the different aspect ratios. Editors told me that it doubled post-production costs, though the company vigorously disputed that. More importantly, Turnstyle created tech hurdles and expenses (and a lawsuit) that distracted the company from fine-tuning basic capabilities like watching on a bigger screen or even, a Kantar Media study found, an effective way to fast-forward or reverse.
  • Fit The Business Model To The Business. Quibi not only wrapped ads around its programs, it also expected people to pay a monthly subscription fee. But YouTube has billions of hours of ad-supported free video. TikTok has millions of hours more. And in between, there’s IGTV, a resurgent Snapchat, and Facebook Watch. Why would they pay for Quibi’s shows? The company never had a compelling answer.

Katzenberg said in a release that the company was founded “to create the next generation of storytelling.” The reality was that he and Whitman built their company predicated on business practices and strategies from the last generation of old-school Hollywood media, even as they promised a new kind of experience for a very different medium. Then they layered in complicated tech, an inability to adapt to dramatically changed circumstances, and a mismatched business model. Let’s hope the next time someone raises a few hundred million dollars for a new streaming service, they find smarter ways to spend that dough.

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TikTok To Provide Greater Insight Into Video Takedowns With New Notification System

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TikTok wants to give users a bit more clarity about why their videos have been removed from the platform due to Community Guidelines violations.

For the past few months, the platform said it has been testing a new notification system that explains its enforcement actions and reminds users of the specific policies that they’ve violated — rather than previously telling them that a blanket violation has occurred. The results of the test have been promising, TikTok says, with visits to its Community Guidelines page tripling and a 14% reduction in appeal requests, which users can lodge if they believe that the takedown was tendered in error.

Today, TikTok has today rolled out the new notification system globally. Along with the name of the policy that the user violated, and a link to its Guidelines — pictured above — TikTok will also provide users information about submitting an appeal.

And in cases where videos are flagged for self-harm or suicide-related content, TikTok says it will now provide users with expert resources through a second notification as a means of support. That said, these resources appear to be a bit vague, including suggesting that users seek professional help via local law enforcement or a suicide hotline, reach out to friends and family, or take a break from whatever is causing them undue stress.

“Being transparent with our community is key to continuing to earn and maintain trust,” the company said of the rollout. “We’re glad to be able to bring this new notification system to all our users, and we’ll keep working to improve the ways we help our community understand our policies as we continue to build a safe and supportive platform.”

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Facebook’s New Podcast Hooks Small Business Owners Up With Established Executives

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Facebook’s next podcast will bring small business owners face-to-face (er, virtually) with established industry moguls to share experiences and insights.

Boost My Business with David Fischer will air every other week. Its debut episode matches entrepreneur Courtney Shaw-Scipio, owner of Charleston-based wedding company Inspired by Annette Event Design and Rentals, with Arian Simone, the well-known businesswoman, author, and investor who cofounded the Fearless Fund.

“We’re at a moment of change, and if we’ve learned anything from the pandemic, it’s that our ability to connect through technology has never been more important,” Facebook said in the series announcement. “Many brands have needed to make significant shifts to their business models, pushing them to navigate new territory and remain resilient in the face of uncertainty.”

Boost My Business appears to be a renamed continuation of Three and a Half Degrees, Facebook’s second-ever original podcast series. Fischer, Facebook’s CRO, hosted that show, too; it launched in January 2019 and offered eight episodes focused on entrepreneurship. Guests included Gary Vaynerchuk, WWE brand officer Stephanie McMahon, McDonald’s president/CEO Chris Kempczinski, and Toms founder Blake Mycoskie.

Upcoming guests for the continuation include Tan France, star of Netflix’s Queer Eye. France is also a Facebook host—he fronts the identically named Watch series Boost My Business, offering advice about digital strategies for companies.

You can check out the first episode of Fischer’s podcast here.

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YouTube Is Running Out Of Room For Political Ads

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We’re officially in election crunch time, and as voting day draws nearer, political campaigns are trying to disseminate one last big push of advertising for their chosen candidates.

But on YouTube, an unusual issue is stymieing their efforts.

According to a report from Bloomberg, the platform has been inundated with so many political ads that its systems are struggling to find spots to place them all. It is especially short of slots that target viewers in critical swing states; prices to place ads in those regions have as much as doubled.

Sources familiar with the matter told Bloomberg that, at times, campaigns are only able to spend about 25% of their planned daily marketing budget because YouTube is simply unable to find space for three-quarters of ads.

Reid Vineis, VP of Republican political ad firm Majority Strategies, said that because of price jumps, what little inventory YouTube can find is often “gobbled up by well-funded campaigns.” So, instead of fighting for increasingly costly spaces, smaller operations are shunting their video ads to other platforms like Hulu and Roku, he explained.

YouTube told Bloomberg that it was seeing high demand across all ad categories this quarter, but declined to comment further. It later told NBC that some campaigns are having issues finding space because of increased demand that stems not only from political parties, but also from election-unrelated sectors like car sales and holiday shopping.

It said that it still has “plenty” of advertising inventory, per NBC.

YouTube parent Google has sold nearly $140 million in U.S. political ads (on YouTube and elsewhere) in just the past month.

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Invisalign Shares Soar Following Huge Quarter, With Substantial Jolt From Charli D’Amelio

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The D’Amelio family — and specifically youngest daughter Charli — are turning out to be a massive booster for brands.

The wholesome 16-year-old and former competitor dancer is the most-followed creator on TikTok by leaps and bounds, with 95 million fans. And she has channeled this influence into myriad brand partnerships, including being named ambassador for a new Gen Z-aimed Morphe sub-brand, the face of Gen Z-Focused financial startup Step, and linking up with Dunkin’ Donuts on a signature drink, which sold hundreds of thousands of cups and significantly bolstered app downloads.

Now, CNN reports that Invisalign parent company Align Technology — maker of the transparent, teeth-adjusting devices — blew past Wall Street forecasts in the third quarter. And this was in large part due to D’Amelio. Align said that sales of its Clear Aligners — which D’Amelio helped promote to her legions of young followers — were up 26% year-over-year in terms of teenagers to 162,700 cases, significantly lifting overall revenues. Accordingly, CNN notes that the stock surged 35% following the earnings report to make it the best-performing stock in the S&P 500 by a long-shot yesterday.

In a release, Align CEO Joe Hogan sang D’amelio’s praises — as well as her campaign co-star Marsai Martin of ABCs’ hit sitcom Black-ish. For her part, D’Amelio joined the company’s so-called #SmileSquad of influencers in August, and began chronicling her process using the product.

“We saw strong response to our new teen and mom-focused consumer campaign with 118% year-over-year increase in total leads, an uptick in consumer engagement from new social media influencers like Charli D’Amelio and Marsai Martin, and a 25.6% year over year increase in teenagers using Invisalign clear aligners,” Hogan said. “Our overall revenue momentum has continued into October.”

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Quibi To Shutter Roughly Dec. 1, Stays TBD On Whether Content Will Live On Elsewhere

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Quibi’s shutdown date is just around the bend.

In an End Of Service announcement on its help page, the short-form video service said it will officially cease operations on or about Dec. 1. At the same time, it said it was unclear whether any programming — featuring top stars and high-profile studio partners, which it spent gobs of money to acquire and produce — would live on elsewhere after the platform’s cessation.

“At this time we do not know if the Quibi content will be available anywhere after our last day of service,” the company wrote, adding somewhat vaguely: “We recommend following #Quibi on Twitter for any news regarding content.”

Quibi launched on April 6, meaning that the company — which raised a total of $1.75 billion in venture funding — will have had an eight-month lifespan when all is said and done.

Variety reports that even as it’s closing up shop, the Quibi app is still vending first-time and recurring subscriptions. Similarly, many production partners are looking to place their projects elsewhere — including CBS StudiosMost Dangerous Game, which stars Liam Hemsworth and Christoph Waltz, and which nabbed two Emmy nominations. Most Dangerous Game had been picked up for a second season before Quibi’s termination.

“Quibi is not succeeding. Likely for one of two reasons: because the idea itself wasn’t strong enough to justify a standalone streaming service or because of our timing,” founder Jeffrey Katzenberg and CEO Meg Whitman wrote in an open letter yesterday. “As a result, we have reluctantly come to the difficult decision to wind down the business, return cash to our shareholders, and say goodbye to our colleagues with grace.”

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Complex Sets Slate Of Three Interactive Series, Streaming Live On Twitch

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Youth culture-oriented digital programmer Complex Networks has pacted with Twitch on its first-ever interactive slate.

The three new series — pop-culture talk show The Daily Drift, fashion customization exploration One Of One, and music competition Type Beat Battle — all bow next week.

One of One, hosted by TikTok star Jake Polino and premiering on Oct. 26, will guide viewers through live customizations of sneakers, hats, t-shirts, jewelry, and more — all while crowdsourcing ideas from the audience. The Daily Drift, hosted by Hannah Rad and Tino Cochino, will cover trending topics as suggested by fans, premiering Oct. 27. Finally, Type Beat Battle will pit two music producers against one another — Verzuz-style — debuting on Oct. 30 and hosted by dancer Ryan ‘Ryanimay’ Conferido (pictured above).

“The media landscape has gone through an incredible evolution navigating from monthly print editions to multiple new channels and revenue streams across digital, social media, and video,” stated Jane Weedon, head of new verticals at Twitch. “Through this partnership, we’re bringing the loyal readers and viewers of Complex behind the scenes, giving them editing power, and creating a space for collaboration.”

In addition to its Twitch slate, Complex also supplies content for Snapchat as well as a burgeoning roster of podcasts. In August, it launched its first tabletop game inspired by flagship YouTube series Hot Ones.

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Record Deals Are So Yesterday. Here’s The New Playbook For Musicians On The Internet.

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Given the ways that the internet has fundamentally changed the music industry, creators must learn the rules of an ever-shifting landscape — and ultimately seek to diversify their revenue streams — to build sustainable careers.

In the latest episode of Tubefilter‘s investigative news show, Creator News, we take a look at these paradigm shifts through the lens of traditionally signed Scottish singer-songwriter KT Tunstall (whose 2004 album Eye To The Telescope sold 5 million copies) as well as self-described “DIY artist” Raye Zaragoza, who owns her own record label.

In the past, given the expenses involved with breaking a new artist — including production and promotional costs — new artists signed contracts with labels that were severely skewed. Labels typically pocketed 80% of any ensuing profits garnered by artists, Tunstall explains, with artists themselves taking home the remaining 20%. Over time, this has created a festering sense of financial exploitation — as evidenced today by top stars like Taylor Swift and Kanye West, who have loudly rebuked skewed deals in which they do not own their own work.

In many ways, however, streaming has enabled artists to leapfrog the system. Zaragoza, for instance, has opted to finance many of the expenses that would’ve traditionally been handled by a label through Patreon. “Because no one is fronting you the money in the form of an advance, you have to raise the money on your own,” she explains. “But then you’re also keeping one hundred percent of your rights to your music.”

Nevertheless, maintaining a sustainable business in the age of coronavirus has become all the more complicated for indie artists, with live shows at a standstill for the foreseeable future. Typically, Zaragoza says 80% of her earnings are derived from live shows and merch sold on tour. And touring is especially critical because streaming revenues aren’t a viable source of income for smaller artists, with Spotify only paying out a fraction of a cent per stream.

Thus, concludes music journalist Matt Medved, the founder of Billboard Dance, it’s more critical than ever that artists on the internet opt to diversify their revenue streams.

“If you get a playlist placement on a music streaming platform, yes you’re going to get streams, which will equate to some more revenue in the short-term,” he said. “But what I think you’re getting, more valuably, is an opportunity to open the door and create a fan with every listen, and that opportunity in the long run is more valuable than whatever you’re getting on the stream.”

Creator News is made possible by and produced in partnership with Patreon–the platform that helps you generate recurring income from your creative work by offering exclusive content and community to your fans. They’ve been amazing partners and we couldn’t do this without them. Go to Patreon.com/CreatorNews to learn more and launch your own Patreon today.

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100 Thieves Is Turning Its Cash App Compound Into A Voting Center

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Ahead of the 2020 election, digital creators have lent their voices to dozens of voter participation campaigns, urging fans to hit the polls (or the postbox). Now, 100 Thieves is taking things a step further by turning its brand-new headquarters into an official voting center.

The gaming/lifestyle org’s 15,000-square-foot Cash App Compound, opened in Culver City earlier this year, is working with Los Angeles County officials to fill its parking lot and patio with socially distanced polling stations. Polls will be open to all from Oct. 30 through Election Day, Nov. 3.

“Ever since we put down roots in this pocket of Los Angeles […] we’ve been looking for ways to give back to the community,” 100 Thieves founder Nadeshot said in a statement. “We’re thankful to the Los Angeles County Registrar-Recorder/County Clerk for the work they are doing this season, and we’re excited to partner with them to offer up our space.”

As part of the transformation, 100 Thieves partnered with graffiti artist Slick, who covered the Cash App Compound’s north wall with a black-and-white mural (pictured above) reading “VOTE.” On Nov. 2, he will change it to read “WE VOTED,” and the finished piece will remain on the building through the middle of November.

 

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A post shared by OG SLICK (@og_slick) on Oct 22, 2020 at 9:45am PDT

100 Thieves—which comprises around 50 digital creators and esports professionals—also noted that it is giving employees a paid vacation day Nov. 3 “to support voter participation.”

Deets for those interested in voting at the compound:

Where: 6050 Jefferson Blvd., Los Angeles, CA 90016
When: Oct. 30-Nov. 2, 10 a.m.-7 p.m.; Nov. 3, 7 a.m.-8 p.m.
Parking: Available in east lot and on street.
COVID Guidelines: Voters are asked to wear facial coverings and gloves.

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100 Thieves Is Turning Its Cash App Compound Into A Voting Center

  • Post category:Other

Ahead of the 2020 election, digital creators have lent their voices to dozens of voter participation campaigns, urging fans to hit the polls (or the postbox). Now, 100 Thieves is taking things a step further by turning its brand-new headquarters into an official voting center.

The gaming/lifestyle org’s 15,000-square-foot Cash App Compound, opened in Culver City earlier this year, is working with Los Angeles County officials to fill its parking lot and patio with socially distanced polling stations. Polls will be open to all from Oct. 30 through Election Day, Nov. 3.

“Ever since we put down roots in this pocket of Los Angeles […] we’ve been looking for ways to give back to the community,” 100 Thieves founder Nadeshot said in a statement. “We’re thankful to the Los Angeles County Registrar-Recorder/County Clerk for the work they are doing this season, and we’re excited to partner with them to offer up our space.”

As part of the transformation, 100 Thieves partnered with graffiti artist Slick, who covered the Cash App Compound’s north wall with a black-and-white mural (pictured above) reading “VOTE.” On Nov. 2, he will change it to read “WE VOTED,” and the finished piece will remain on the building through the middle of November.

 

View this post on Instagram

 

A post shared by OG SLICK (@og_slick) on Oct 22, 2020 at 9:45am PDT

100 Thieves—which comprises around 50 digital creators and esports professionals—also noted that it is giving employees a paid vacation day Nov. 3 “to support voter participation.”

Deets for those interested in voting at the compound:

Where: 6050 Jefferson Blvd., Los Angeles, CA 90016
When: Oct. 30-Nov. 2, 10 a.m.-7 p.m.; Nov. 3, 7 a.m.-8 p.m.
Parking: Available in east lot and on street.
COVID Guidelines: Voters are asked to wear facial coverings and gloves.

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