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April 2, 2020

Quibi leads the rush of three new streaming services

By GlobalData Consumer

Mobile-focused streaming service Quibi is set to launch on 6 April, followed nine days later by NBCUniversal’s Peacock, while AT&T’s highly vaunted HBO Max offering is slated to launch in May.

Unveiling a new service in the middle of global pandemic might seem like a bad idea. That is, unless the new service revolves around streaming entertainment that is likely to engross viewers who are stuck at home for the interim. This is the unexpected fortune for these three upcoming video service launches in the United States.

Quibi first out of the gate

Quibi’s name is short for “quick bites,” because its mobile-focused content will be delivered in brief chunks. Movie segments are limited to just 7-10 minutes and ads will be succinct as well. Producer and media executive Jeffrey Katzenberg’s Quibi will be bundled into T-Mobile USA’s wireless family plans. Otherwise, customers will pay $4.99/month for an ad-supported version or $7.99/month to go ad-free.

Though aimed at a mobile audience, Quibi stands to gain from the Covid-19 pandemic’s social distancing guidelines. Many people watch video on mobile devices while at home. As folks return to school, work and more normalized lives over time, they are likely to continue maintaining physical separation to remain healthy. This would be conducive to people on the street immersing themselves in short Quibi videos.

Nonetheless, it remains to be seen how many viewers will be willing to pay for a Quibi subscription, especially as the US economy will likely be challenged for months to come by effects from the pandemic lockdown.

Peacock will split its arrival

The initial arrival of NBCUniversal’s Peacock is fortuitous in terms of grabbing the public’s undivided attention as many people remain restricted to their home turf. Peacock Premium will launch 15 April, while Peacock Free – a gratis, ad-supported option – will debut nationally 15 July.

Peacock Premium will also be ad-supported and provided for free to 24 million Comcast and Cox Communications subscribers. The premium tier will include the Peacock Free programming plus Peacock originals and tent-pole series. This programming level will also be sold standalone at $4.99/month for access on mobile and web devices. All Peacock Premium customers will be able to pay extra to go ad-free.

Peacock’s low cost will be a big selling point, especially in an economy that has suddenly cooled from red hot to ice cold thanks to Covid-19. NBCUniversal expects advertising and subscriptions will enable Peacock to become profitable after its first five years. However, it will only generate average revenue per user of $6-$7/month.

HBO Max is highly anticipated

Potential customers appear most excited about WarnerMedia’s HBO Max, an SVOD (subscription video on demand) service launching in May that will have the advantage of 10 million existing HBO subscribers on AT&T distribution platforms who will be offered immediate access at no additional charge.

The service will carry an impressive catalog of hit shows, movies and exclusive originals, and will cost $14.99/month. However, people can pay less to get Netflix, Hulu, Amazon Prime Video, Disney+, Apple+ or, of course, Peacock or Quibi. Commencing with a premium price in a coronavirus-weary market minus a less expensive ad-supported tier (expected to come in 2021), HBO Max may struggle to lure customers not already in the HBO and HBO Now ecosystem.

Quibi, Peacock and HBO Max are launching during a time of unexpected economic and social upheaval. It will take time to understand whether that will benefit or harm their long-term prospects.