Quibi raises even more money
Emailed on March 6th 2020 in The Friday Forward
Alright, it's officially time for someone to explain to me what I'm missing here...
This week short-form video streamer Quibi said it has closed a second round of financing worth $750 million, bringing its total investment to $1.75 billion about a month before the service’s planned launch.
Unveiling a total of 175 new original shows and 8,500 individual episodes during its first year, none of which will run longer than 10 minutes, Quibi is gambling that subscribers will pay $4.99 to $7.99 a month for access to narrative chunks designed for on-the-go consumption—similar to content popular on Alphabet Inc.’s YouTube, but made with top-shelf production values, courtesy of acclaimed Hollywood filmmakers and actors.
Quoting Leo Polovets, General Partner at Susa Ventures,
"I'd love to see the napkin math that justifies this bet. $1.75b raised pre-launch! Let's say valuation was $4b. Best case might be 40x (Netflix scale). Hulu-sized outcome at $16b wouldn't even be 4x. High risk of losing all capital."
On top of that, look at the spread on content budgets in 2020:
Netflix $18.5 billion
Amazon $8.5 billion
Apple TV+ $6 billion
Hulu $4.5 billion
Disney+ $2.5 billion
HBO Max $2 billion
Peacock $1.5 billion
Quibi $1 billion
CBS All Access $1 billion
What am I missing?
