Speaking to WARC at last week’s Cannes Lions festival, he was emphatic that the project will only be successful if it can deliver a great consumer experience. (For more, read WARC’s report: Quibi’s Jeffrey Katzenberg on creating an ad model to suit both brands and subscribers.)
“To that end, I think we have protected our customers,” he said, as he set out a planned advertising schedule that will see videos of between five and ten minutes carrying one 15-second ad, and anything under five minutes one 10-second ad.
“If you do the math, it means if you’ve watched an hour of content on Quibi, you will watch two and a half minutes of commercials,” he pointed out.
That’s a figure that compares favourably with other video options – 17.5 minutes of ads per hour on broadcast TV, for example, or ten minutes on Hulu – “so I think we’ve hit a home run. It’s a tiny ad load compared to any other proposition that exists out there.”
Advertisers, meanwhile, can enjoy the rare experience of not being grouped together with a bunch of other brands since each ad stands alone.
“They’re never in a pot of five, six [or] eight commercials, which is what happens anywhere else,” said Katzenberg.
Plus the audience itself is targeted and curated. “It’s an audience that has to a very large degree abandoned traditional broadcast cable TV, so [isn’t accessible elsewhere],” he said. “And every single piece of content on Quibi is curated, so it’s brand safe.”
Even with ads, users will still pay for the service – even if it’s just $4.99 a month – although if they really can’t stand the two and a half minutes an hour they can shell out $7.99 to avoid them altogether. Katzenberg expects 75% of subscribers to take the cheaper option.
You can’t produce the premium short-form content Quibi has planned – A-list creators like Steven Spielberg are on board – via ad-funding alone, he added.
Consider that a ten-minute piece of content might cost $1m to make: “You can’t charge enough – the CPM would be $2,000. It’s just not possible to do it.”
Sourced from WARC