In line with recent rumors, Roku (NASDAQ: ROKU) confirmed last week that it will indeed acquire distribution rights to Quibi’s content library in its largest onslaught on exclusive content so far. Quibi exploded spectacularly last year just six months after launch, in part because its content didn’t seem to resonate with consumers, despite having a star-studded lineup in a program portfolio.
Can Quibi’s content work better on the Roku platform than on your own?
Image source: Roku.
What’s included in the deal
The deal includes 75 programs and documentaries that Quibi spent more than $ 1 billion to produce. The financial terms were not disclosed directly, but Wall Street Newspaper says Roku is spending less than $ 100 million to secure distribution rights.
Note that Roku is not purchasing the content at once, but only the exclusive distribution rights for the remaining two years that Quibi had already established with the content creators, which include many prominent Hollywood studios and media companies. After this period, Roku may continue to display the content until 2027, according to WSJ. In addition, there will be more than a dozen new programs that have been produced, but never premiered on Quibi before the service is closed. This content will debut for the first time on the Roku platform.
The programs and documentaries will be available for free on Canal Roku later this year. The informed price makes the bet very affordable for Roku, and the company has plenty of time to recover the costs with ad revenue.
Same content, different strategy
There are several differences between Roku’s and Quibi’s strategic plans. Perhaps most importantly, it will offer programs for free, with ad support. Quibi, on the other hand, had two different payment levels: $ 5 a month with ads or $ 8 a month without ads.
In addition, Quibi was launched as an experiment only for mobile devices. You could only watch short programs on mobile devices, an approach that was disheartening for many consumers. Quibi quickly tried to turn to support the TV show, mainly because the service was launched at a time when the pandemic was forcing much of the world to close and stay at home. The initial idea was that people could enjoy the shows while traveling on public transport, but then everyone stopped traveling.
The whole strategy was not attractive enough to make consumers open their wallets, especially with the intense competition between streaming services that offered more features and / or deeper catalogs at comparable prices. But to put Quibi programs for free on real TVs and, at the same time, take advantage of a streaming channel that has an audience of almost 62 million people and uses increasingly sophisticated advertising technology? This can work.