Can ReelShort succeed with short-form video entertainment where Quibi failed?
Photo: Tommy Tong
A little over three years ago some of America’s most notable entertainment executives killed off an attempt to revolutionise smartphone entertainment. The ill-fated platform, spearheaded by former Walt Disney chairman Jeffrey Katzenberg and backed with a $2 billion war chest, was Quibi. The subscription video app promising bitesize TV content had an impressive catalogue, with shows starring Liam Hemsworth, Idris Elba, and Kiefer Sutherland. However, within six months, Quibi was shut down in October 2020 after subscriber numbers struggled. Since then, short-form video has been the domain of social video platforms like TikTok, YouTube Shorts, and Instagram Reels.
So, how did Quibi get it so wrong? The commercial rationale was not ludicrous. Social video had demonstrated a desire among entertainment consumers to snack on short-form video content. Marrying that with big money shows fronted by well-known celebrities should have built some momentum. Perhaps the price point was too high at $4.99 and $7.99 a month for the respective AVOD and ad-free offers? There were also questions about quality of Quibi’s content.
For Quibi’s executives, the failure was down to bad timing. This was a short-form video app aimed at busy people who could consume snippets of drama during a hectic workday. However, it came amid a global pandemic when nearly everyone had extra time to binge on long-form video at home. Since its closure, a market consensus has developed that Quibi’s failure was actually down to its core use case. Put simply, entertainment consumers want short-form social content but they do not want short-form TV shows, movies, and documentaries. No matter how well-executed Quibi was, it was always doomed to fail.
This view is now being challenged in the ad-supported space. Earlier this year (2023), a trend emerged where video pirates and entertainment companies alike began cutting up episodes of popular shows like Grey’s Anatomy and South Park before publishing them on TikTok. Paramount went a step further in October 2023 by releasing the whole Mean Girls movie for free on the Bytedance-owned platform. As a result, the Mean Girls TikTok accounts’ following has more than doubled over the last 30 days to 430,500 as of November 29th. It showed that there is an appetite for short-form drama on social video platforms. At the moment, it is a marketing play that helps entertainment companies push social video consumers towards their streaming TV services. However, it once again raises the question as to whether entertainment companies can find a way to start charging for short-form TV shows.
The right recipe for short-form TV shows
Enter ReelShort, the short-form video app that has seen a spike in popularity for its soap opera content, accumulating over 11 million downloads on Apple and Android app stores combined. The smartphone app, owned by the China-based publisher COL Group, typically splits hour-long TV shows into a series of one-minute episodes. Unlike Quibi, the content is absent of well-known stars. Shows such as Bound By Vendetta and The Double Life of My Billionaire Husband would not look out of place on the Hallmark channel. In a further departure from Quibi, the app has positioned itself as anti-subscription. In its marketing material, ReelShort asks “are you tired of paying for subscriptions you don’t really use?” before offering several ways to pay for content. Users can watch a number of episodes for free, rent or buy individual series on a pay-per-view basis, or earn digital coins to purchase episodes by watching adverts. While Quibi failed to adapt to the pandemic, ReelShort has a business model of pay-per-view and ad-funded viewing that is aimed at the cost-of-living crisis consumer.
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Disrupting subscription video on demand
So, who should be worried? Back in September, MIDiA stated that YouTube should capitalise on the trend of big budget TV shows being distributed as short-form content on TikTok. MIDiA’s analysis was driven by the flexibility of YouTube’s offer, from YouTube Shorts to its streaming TV relationships through its Prime Time channels. As a result, there was an opportunity to expand the relationships with its streaming TV partners towards show licencing on YouTube Shorts that could help drive engagement towards YouTube Premium and its pay-TV offer.
However, ReelShort now stands as both a threat and an opportunity to Netflix and YouTube. Afterall, YouTube was forced to fend off the short-form threat from TikTok by launching Shorts. There is a danger that ReelShort could become Netflix’s TikTok moment.
Such is Netflix’s dominance that it may not wish to cannibalise its monthly subscriber base by offering a short-form pay-per-view offer. However, the same argument was once applied to advertising. Netflix has given some consideration to short-form content. In March 2021, it soft launched an in-app service called Fast Laughs that displayed funny clips from its roster of movies and shows in a TikTok-style feed.
A new acquisition funnel
Ultimately, ReelShort is demonstrating that a consumer niche will pay for short-form TV show content if the payment offer is right. Quibi also demonstrated this but ultimately failed because it tried to shoehorn a traditional subscription model onto an emerging media format. ReelShort‘s aim is to prove particularly popular with cash-strapped younger consumers who are used to free-to-access social video content. For streaming TV services looking to build profitable businesses in these challenging times, keeping a close eye on ReelShort will be important. If it succeeds, then the ReelShort business model could be used to entice younger viewers at the lowest entry point before converting them into paying subscribers when their disposable income improves.