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8% is not a terrible conversion rate at all, and they’ve only just started. I’m not a Quibi user and have no vested interest in them either way but this is the

8% is not a terrible conversion rate at all, and they’ve only just started. I’m not a Quibi user and have no vested interest in them either way but this is the third different article I’ve seen in the last week or 2 talking about how terrible they’re doing and now they’re about to crash and burn, because of an 8% conversion? Comparing them to Disney is ridiculous too, it’s Disney! With multiple generations obsessed with their library and people literally counting down the days until their launch, they got a 10% conversion... but 8% is horrible and the end of Quibi?

Nextgrid 6y ago
On the other hand, Disney has mountains of cash behind them while Quibi is VC-funded and VCs typically want to see results to decide whether to continue or cut their losses. Disney can get away with a terrible conversion rate forever while a startup can run out of funding very quickly.
- formercoder 6y ago
  It’s crazy that a VC would fund Quibi. Producing that content is expensive and their margins will never justify that type of equity funding.
duxup 6y ago
Did the user have to provide a credit card, are a lot of these 8% maybe just folks who forgot to unsubscribe? I feel like this conversion rate thing really "depends".
- formercoder 6y ago
  Probably in app subscription in the future agreement
- FalconSensei 6y ago
  I saw a few tweets saying 'remember to cancel Quibi', so I guess it's auto renew by default? Most streaming services are like this
- jeromegv 6y ago
  On iOS this was just in-app purchase, so you agree to start paying in 3 months when you sign up. So you never really have to manually type your credit card but you had to remember to unsubscribe within your iTunes subscriptions.
  - jonny_eh 6y ago
    And unsubscribing via iOS is surprisingly challenging.
    - cgriswald 6y ago
      I find your statement surprising. The ease of changing or removing a subscription is the largest reason I would subscribe through iOS to anything. Is there something specific to Quibi?
      - MBCook 6y ago
        No, but finding where are you unsubscribe an iOS is not the most intuitive thing. Luckily they send those emails to you that remind you that you’re about to start getting charged.
        dhosek 6y ago
        Indeed. I'd been paying for HBO through Apple since they launched HBONow. When we got AT&T fiber, they bundled in HBOMax for free. AT&T made it annoyingly difficult to sign up for the free service. And it took a while to figure out how to unsubscribe from HBO in iTunes.
      - enos_feedler 6y ago
        I've just got into the habit of unsubscribing every time I start a free trial on iOS. I just tap settings -> iCloud account -> subscriptions and then cancel the sub I just started. It gives me access throughout the trial and if I go to use it and it blocks me because the subscription ended I take measure of my own sadness to decide I want to pay.
danso 6y ago
The recent major articles about Quibi being a disaster are not been about conversion rate, but about its huge costs combined with questionable proposition (which was particularly affected by quarantine life changes), and its poor performance on app store charts: https://www.vulture.com/2020/07/is-anyone-watching-quibi.html https://www.vulture.com/2020/07/is-anyone-watching-quibi.htm... > As of early July, over 5 million phones had downloaded the Quibi app. Of those, 1.5 million had registered to use it, and this was with Quibi offering a three-month free trial and doing saturation marketing. (When it paused the marketing during the Black Lives Matter protests, Quibi’s App Store ranking fell to No. 1,477.) In light of its disappointing user numbers, Quibi’s advertisers have reportedly asked to renegotiate their deals. The company was forced to go into capital-conservation mode. Executives took a 10 percent pay cut. Also, 8% does not sound like a good conversion rate for the entertainment industry, even ignoring the disparity between subscription revenue and the hundreds of millions already spent for content: > *Meanwhile, the 90-day free trials will begin expiring this month. The industry conversion rate from a free trial to a paid subscription hovers below 33 percent. According to research firm Parks Associates, if that holds true for Quibi, it could mean less than 500,000 people would be watching a network that spent hundreds of millions of dollars on brand-new premium content.
- paulcole 6y ago
  Also most of the stuff that they greenlit (and paid a lot for) was older content that had been shopped around for quite awhile with no takers.
- Causality1 6y ago
  I was dubious about Quibi when I spent months seeing the occasional advertisement and still having not the slightest idea what Quibi is or why I would want it. I figured it was some flash in the pan social network that would shortly be dead. I didn't even know it was a video service until I saw its financial distress covered on HN.
  - 9wzYQbTYsAIc 6y ago
    “Build it and they will come” jumps to mind here.
brootstrap 6y ago
Agree seems like there is disproportionate dislike here for quibi. How many other billion dollar startups eat the shitter without this much hub-bub? However it is fair to hate on the founder jeffrey shrekzenburg. I know some folks who work at quibi and say this dude is insufferable. Probably not as insane, but stephen wolfram levels of dooshbaggery. Dictator type who thinks is shit is golden. Turns out he made a 1.5 billion dollar piece of shit and from what i hear, he has finally accepted that maybe he isnt the greatest thing ever. Also if you like shrek, he made shrek/dreamworks. And short little farquad is basically jaffrey katzenburg from what i've heard
- wolco 6y ago
  Doesn't 'Meg' no more wfh or daycare but will install a private daycare for herself Whittman co ceo this company?
  - selimthegrim 6y ago
    Wasn’t that Marissa Mayer?
hn_check 6y ago
I assume Quibi signups were people much more interested and motivated in what the platform offers, versus Disney+ where millions signed up just to see what this Netflix competitor was about. But sure there is a narrative of failure around Quibi because it seems inevitable that it will fail short of some remarkable niche success. That remarkable niche success hasn't come.
cpsempek 6y ago
I actually don’t know if 8% is a good or bad conversion rate for free trial to month 1 paid subscriber for streaming services, or even just subscription services. In online marketing world, yes 8% is terrific, since just CTRs stand around 1%. So, just curious what baseline you’re referencing to conclude 8% is good. Edit - some cursory googling suggests free trial to paid conversion for subscription services are generally somewhere in the 10-25% range. So I don’t think 8% is good, maybe mediocre. Note this is distinguished from lower rates associated with freemium model products(e.g., spotify). Will try to dig up some better refs to link out to.
mikeryan 6y ago
I work in this industry and generally agree with your assessment. However a few things, the general industry perspective went like this: 1. David Katzenberg and Meg Whitman were creating a consumer service targeting a demographic they don't fit in a field they've not worked in. (Consumer apps for a younger demographic) 2. They got 1.8 Billion in funding. For fuck's sake you should get one breakout hit piece of content from that. (Note Apple is struggling a bit with this one too). With the funding, hype and content they've spent on the expectations are going to be pretty damn astronomical, they brought high expectations on themselves. 3. Their entire premise was based on this concept of quick bites of content. With an almost 2 billion dollar war chest the right thing to do would have been to test this theory maybe? Roll out a single show first, backfilled with some news? Get some feedback maybe? Quibi is led by some serious heavy hitters, so its not spoken much out loud but I think a lot of folks in the industry felt this play was based mostly on hubris and now there's a certain sense of schadenfreude as they start to flail.
- thiagocesar 6y ago
  Apple, Quibi, Amazon are trying to plan the perfect breakout show. It doesn’t work like that. A lot of the networks’s and Netflix’s breakout shows were not planned to be great. That’s why they just greenlight a bunch of random pilots and see what sticks to the wall. It’s extremely hard to create hits.
  - cleansingfire 6y ago
    That's what I find striking. With all their experience & expertise, the major studios spend a tremendous amount of money and consistently produce a surprising number of failures. Personally, I like the wider seeding creatively in general (as you describe with Netflix.)
    - throwaway43234 6y ago
      And those are just the failures you see! Friends in the industry tell me there are many more failures behind the scenes where shows can get arbitrarily far down the production pipeline only for studio execs to come in and scrap the whole thing. We're not so different from those 1000 monkeys writing shakespeare :)
draw_down 6y ago
What's with the pollyanna stuff on HN around this obvious failure? There isn't one thing going well here, but I keep seeing HN comments acting like writing it off is some kind of moral crime. It was a bad idea and it's failing. Could they turn it around, sure I suppose, anything is possible. But right now it's not looking so hot. It's not a big deal to say that.
ogre_codes 6y ago
> they’re about to crash and burn, because of an 8% conversion? They are crashing and burning because they have fewer than 100k users after nearly 4 months and aside from piling a lot more money into advertising they have no momentum, no brand awareness, and no properties anyone outside a few people know. > Comparing them to Disney is ridiculous too, it’s Disney! It's not about 10% versus 8%, it's about 10s of millions of paying users versus 10s of thousands. Obviously Disney had a huge head start, that's the whole point. The two services cost the same amount, what attracts new users? Content. For my $7, I'm going to sign up for the service with content I know I'll like. That's the same choice millions of people made here.
charlesju 6y ago
Another point. Especially with these content based services, it's all about the next piece of content you can provide. For example, if Dave Chapelle signed an exclusive deal with Quibi, then all of a sudden those 92% that didn't want to come back will come back in droves. Quibi isn't a lost cause, they set up the infrastructure and are just getting started on releasing content. Everything depends on if they can find their must-see-tv.
- wolco 6y ago
  Dave Chapelle would require 500 million to leave netflix. 1.7 billion sounds like a lot but netflix spends more per year on programming only.
mixmastamyk 6y ago
Also at $6.99 Disney is practically "dumping" their valuable content on the market. How is a newcomer supposed to compete with that? Talk about barriers to entry. Netflix is getting $12.99 from me and it doesn't look like a bargain compared to Disney.
gimmeThaBeet 6y ago
I guess that's fair enough, it is admittedly difficult to separate that I am personally not interested in Quibi vs I don't see why it could succeed. I guess the two things it boils down to is their place in the market, and who their customers are? - I think Netflix speaks for itself. - Disney+/Hulu has the power of the catalog, generations of IP, and creatives to leverage it. - HBO is HBO if ATT can manage to keep it that way. - Amazon has quite a few good things going on imo, and it helps a lot that its just attached to prime. So now with these players, we're very much at the point of marginal overload. Why do I want your service? What do you have that no one else does? So I guess what I'm really interested in is who that 8% is? In what ways does Quibi work, because I already feel like I have an idea/opinion of how it doesn't work.
- wolco 6y ago
  If adoption and renewal keep going this way Quibi will have 8000 users. Friends and family maybe 1,000. Forgetful people not uninstalling after the trial probably 6000. Of those 1000 users probably varied. Some expect something. Some want every streaming service. Some want 10 minute videos. Some never unsubscribe.
andreilys 6y ago
8% is terrible. Imagine what the Customer acquisition cost ($10-$20?), that means the customer conversion cost is $125-$250. With a $5-$8 trial you can see how the economics of this simply do not work.
mlthoughts2018 6y ago
I think it’s a mistake to treat this like a conversion experiment. Trialers at the very first possible release of a service, heavily incentivized by a very lengthy free trial, are not similar to a steady state flow of trialers experiencing more transient promos or test experiences, which is a situation where conversion modeling makes sense. This is not a funnel experiment. This is a huge pile of people specifically seeking out a special event at a launch, so the composition and intent of that is expected to be way, way, way more favorable than general steady state. It’s like if concert tickets went on sale and everyone is camping in tents to buy them on the first day, and then when the booth opens and people listen to the free sample, 90% of them just pack up and go home. That’s a much, much worse situation than if only 1/10 people who see an ad for the album choose to buy it on iTunes, whole different ballgame, funnel composition, intent model, everything. 10% conversion on a massive launch promo is drastic failure. This is not at all like getting 10% conversion on a funnel with low intent.
Waterluvian 6y ago
I wonder what portion of that 8% are basically accidental paying customers at the moment.

Nextgrid 6y ago

On the other hand, Disney has mountains of cash behind them while Quibi is VC-funded and VCs typically want to see results to decide whether to continue or cut their losses. Disney can get away with a terrible conversion rate forever while a startup can run out of funding very quickly.

formercoder 6y ago
It’s crazy that a VC would fund Quibi. Producing that content is expensive and their margins will never justify that type of equity funding.

duxup 6y ago

Did the user have to provide a credit card, are a lot of these 8% maybe just folks who forgot to unsubscribe? I feel like this conversion rate thing really "depends".

formercoder 6y ago
Probably in app subscription in the future agreement
FalconSensei 6y ago
I saw a few tweets saying 'remember to cancel Quibi', so I guess it's auto renew by default? Most streaming services are like this
jeromegv 6y ago
On iOS this was just in-app purchase, so you agree to start paying in 3 months when you sign up. So you never really have to manually type your credit card but you had to remember to unsubscribe within your iTunes subscriptions.
- jonny_eh 6y ago
  And unsubscribing via iOS is surprisingly challenging.
  - cgriswald 6y ago
    I find your statement surprising. The ease of changing or removing a subscription is the largest reason I would subscribe through iOS to anything. Is there something specific to Quibi?
    - MBCook 6y ago
      No, but finding where are you unsubscribe an iOS is not the most intuitive thing. Luckily they send those emails to you that remind you that you’re about to start getting charged.
      - dhosek 6y ago
        Indeed. I'd been paying for HBO through Apple since they launched HBONow. When we got AT&T fiber, they bundled in HBOMax for free. AT&T made it annoyingly difficult to sign up for the free service. And it took a while to figure out how to unsubscribe from HBO in iTunes.
    - enos_feedler 6y ago
      I've just got into the habit of unsubscribing every time I start a free trial on iOS. I just tap settings -> iCloud account -> subscriptions and then cancel the sub I just started. It gives me access throughout the trial and if I go to use it and it blocks me because the subscription ended I take measure of my own sadness to decide I want to pay.

danso 6y ago

The recent major articles about Quibi being a disaster are not been about conversion rate, but about its huge costs combined with questionable proposition (which was particularly affected by quarantine life changes), and its poor performance on app store charts: https://www.vulture.com/2020/07/is-anyone-watching-quibi.html https://www.vulture.com/2020/07/is-anyone-watching-quibi.htm... > As of early July, over 5 million phones had downloaded the Quibi app. Of those, 1.5 million had registered to use it, and this was with Quibi offering a three-month free trial and doing saturation marketing. (When it paused the marketing during the Black Lives Matter protests, Quibi’s App Store ranking fell to No. 1,477.) In light of its disappointing user numbers, Quibi’s advertisers have reportedly asked to renegotiate their deals. The company was forced to go into capital-conservation mode. Executives took a 10 percent pay cut. Also, 8% does not sound like a good conversion rate for the entertainment industry, even ignoring the disparity between subscription revenue and the hundreds of millions already spent for content: > *Meanwhile, the 90-day free trials will begin expiring this month. The industry conversion rate from a free trial to a paid subscription hovers below 33 percent. According to research firm Parks Associates, if that holds true for Quibi, it could mean less than 500,000 people would be watching a network that spent hundreds of millions of dollars on brand-new premium content.

paulcole 6y ago
Also most of the stuff that they greenlit (and paid a lot for) was older content that had been shopped around for quite awhile with no takers.
Causality1 6y ago
I was dubious about Quibi when I spent months seeing the occasional advertisement and still having not the slightest idea what Quibi is or why I would want it. I figured it was some flash in the pan social network that would shortly be dead. I didn't even know it was a video service until I saw its financial distress covered on HN.
- 9wzYQbTYsAIc 6y ago
  “Build it and they will come” jumps to mind here.

brootstrap 6y ago

Agree seems like there is disproportionate dislike here for quibi. How many other billion dollar startups eat the shitter without this much hub-bub? However it is fair to hate on the founder jeffrey shrekzenburg. I know some folks who work at quibi and say this dude is insufferable. Probably not as insane, but stephen wolfram levels of dooshbaggery. Dictator type who thinks is shit is golden. Turns out he made a 1.5 billion dollar piece of shit and from what i hear, he has finally accepted that maybe he isnt the greatest thing ever. Also if you like shrek, he made shrek/dreamworks. And short little farquad is basically jaffrey katzenburg from what i've heard

wolco 6y ago
Doesn't 'Meg' no more wfh or daycare but will install a private daycare for herself Whittman co ceo this company?
- selimthegrim 6y ago
  Wasn’t that Marissa Mayer?

hn_check 6y ago

I assume Quibi signups were people much more interested and motivated in what the platform offers, versus Disney+ where millions signed up just to see what this Netflix competitor was about. But sure there is a narrative of failure around Quibi because it seems inevitable that it will fail short of some remarkable niche success. That remarkable niche success hasn't come.

cpsempek 6y ago

I actually don’t know if 8% is a good or bad conversion rate for free trial to month 1 paid subscriber for streaming services, or even just subscription services. In online marketing world, yes 8% is terrific, since just CTRs stand around 1%. So, just curious what baseline you’re referencing to conclude 8% is good. Edit - some cursory googling suggests free trial to paid conversion for subscription services are generally somewhere in the 10-25% range. So I don’t think 8% is good, maybe mediocre. Note this is distinguished from lower rates associated with freemium model products(e.g., spotify). Will try to dig up some better refs to link out to.

mikeryan 6y ago

I work in this industry and generally agree with your assessment. However a few things, the general industry perspective went like this: 1. David Katzenberg and Meg Whitman were creating a consumer service targeting a demographic they don't fit in a field they've not worked in. (Consumer apps for a younger demographic) 2. They got 1.8 Billion in funding. For fuck's sake you should get one breakout hit piece of content from that. (Note Apple is struggling a bit with this one too). With the funding, hype and content they've spent on the expectations are going to be pretty damn astronomical, they brought high expectations on themselves. 3. Their entire premise was based on this concept of quick bites of content. With an almost 2 billion dollar war chest the right thing to do would have been to test this theory maybe? Roll out a single show first, backfilled with some news? Get some feedback maybe? Quibi is led by some serious heavy hitters, so its not spoken much out loud but I think a lot of folks in the industry felt this play was based mostly on hubris and now there's a certain sense of schadenfreude as they start to flail.

thiagocesar 6y ago
Apple, Quibi, Amazon are trying to plan the perfect breakout show. It doesn’t work like that. A lot of the networks’s and Netflix’s breakout shows were not planned to be great. That’s why they just greenlight a bunch of random pilots and see what sticks to the wall. It’s extremely hard to create hits.
- cleansingfire 6y ago
  That's what I find striking. With all their experience & expertise, the major studios spend a tremendous amount of money and consistently produce a surprising number of failures. Personally, I like the wider seeding creatively in general (as you describe with Netflix.)
  - throwaway43234 6y ago
    And those are just the failures you see! Friends in the industry tell me there are many more failures behind the scenes where shows can get arbitrarily far down the production pipeline only for studio execs to come in and scrap the whole thing. We're not so different from those 1000 monkeys writing shakespeare :)

draw_down 6y ago

What's with the pollyanna stuff on HN around this obvious failure? There isn't one thing going well here, but I keep seeing HN comments acting like writing it off is some kind of moral crime. It was a bad idea and it's failing. Could they turn it around, sure I suppose, anything is possible. But right now it's not looking so hot. It's not a big deal to say that.

ogre_codes 6y ago

> they’re about to crash and burn, because of an 8% conversion? They are crashing and burning because they have fewer than 100k users after nearly 4 months and aside from piling a lot more money into advertising they have no momentum, no brand awareness, and no properties anyone outside a few people know. > Comparing them to Disney is ridiculous too, it’s Disney! It's not about 10% versus 8%, it's about 10s of millions of paying users versus 10s of thousands. Obviously Disney had a huge head start, that's the whole point. The two services cost the same amount, what attracts new users? Content. For my $7, I'm going to sign up for the service with content I know I'll like. That's the same choice millions of people made here.

charlesju 6y ago

Another point. Especially with these content based services, it's all about the next piece of content you can provide. For example, if Dave Chapelle signed an exclusive deal with Quibi, then all of a sudden those 92% that didn't want to come back will come back in droves. Quibi isn't a lost cause, they set up the infrastructure and are just getting started on releasing content. Everything depends on if they can find their must-see-tv.

wolco 6y ago
Dave Chapelle would require 500 million to leave netflix. 1.7 billion sounds like a lot but netflix spends more per year on programming only.

mixmastamyk 6y ago

Also at $6.99 Disney is practically "dumping" their valuable content on the market. How is a newcomer supposed to compete with that? Talk about barriers to entry. Netflix is getting $12.99 from me and it doesn't look like a bargain compared to Disney.

gimmeThaBeet 6y ago

I guess that's fair enough, it is admittedly difficult to separate that I am personally not interested in Quibi vs I don't see why it could succeed. I guess the two things it boils down to is their place in the market, and who their customers are? - I think Netflix speaks for itself. - Disney+/Hulu has the power of the catalog, generations of IP, and creatives to leverage it. - HBO is HBO if ATT can manage to keep it that way. - Amazon has quite a few good things going on imo, and it helps a lot that its just attached to prime. So now with these players, we're very much at the point of marginal overload. Why do I want your service? What do you have that no one else does? So I guess what I'm really interested in is who that 8% is? In what ways does Quibi work, because I already feel like I have an idea/opinion of how it doesn't work.

wolco 6y ago
If adoption and renewal keep going this way Quibi will have 8000 users. Friends and family maybe 1,000. Forgetful people not uninstalling after the trial probably 6000. Of those 1000 users probably varied. Some expect something. Some want every streaming service. Some want 10 minute videos. Some never unsubscribe.

andreilys 6y ago

8% is terrible. Imagine what the Customer acquisition cost ($10-$20?), that means the customer conversion cost is $125-$250. With a $5-$8 trial you can see how the economics of this simply do not work.

mlthoughts2018 6y ago

I think it’s a mistake to treat this like a conversion experiment. Trialers at the very first possible release of a service, heavily incentivized by a very lengthy free trial, are not similar to a steady state flow of trialers experiencing more transient promos or test experiences, which is a situation where conversion modeling makes sense. This is not a funnel experiment. This is a huge pile of people specifically seeking out a special event at a launch, so the composition and intent of that is expected to be way, way, way more favorable than general steady state. It’s like if concert tickets went on sale and everyone is camping in tents to buy them on the first day, and then when the booth opens and people listen to the free sample, 90% of them just pack up and go home. That’s a much, much worse situation than if only 1/10 people who see an ad for the album choose to buy it on iTunes, whole different ballgame, funnel composition, intent model, everything. 10% conversion on a massive launch promo is drastic failure. This is not at all like getting 10% conversion on a funnel with low intent.

Waterluvian 6y ago

I wonder what portion of that 8% are basically accidental paying customers at the moment.