In line with recent rumors, Roku (NASDAQ: ROKU) confirmed last week that it will indeed acquire the distribution rights to Quibi’s content library in its biggest impact on exclusive content to date. Quibi flared up spectacularly just six months after launch last year, in part because the content did not appeal to the consumer, although it had a star-studded range in a portfolio of shows.
Can Quibi’s content work better on Roku’s platform than its own?
Image source: Roku.
What is included in the agreement?
The deal includes 75 shows and documentaries that Quibi has spent more than $ 1 billion producing. Financial terms were not disclosed directly, but The Wall Street Journal says Roku is spending less than $ 100 million to secure the distribution rights.
Note that Roku does not acquire the content directly, but only the exclusive distribution rights for the remaining two-year window that Quibi has already set up with content creators, which includes many prominent Hollywood studios and media companies. After that time frame, Roku could continue to show content until 2027, according to WSJ. In addition, more than a dozen new programs will be produced, but which never premiered on Quibi before the service closed. The content will appear on Roku’s platform for the first time.
The programs and documentaries will be available for free on The Roku Channel later this year. The reported price tag makes it a fairly affordable bet for Roku, and the company has plenty of time to recoup the cost with advertising revenue.
Same content, different strategy
There are several differences between Roku’s strategic plans and Quibi’s. Most importantly, it will offer the programs for free, supported by ads. Quibi, on the other hand, has two different pay levels: $ 5 per month with ads, or $ 8 per month without ads.
On top of that, Quibi launched as a mobile experience. You could only watch the short programs on mobile devices, which hampers many consumers. Quibi quickly turned to supporting TV viewing, especially since the service started just when the pandemic forced a large part of the world to shut down and stay home. The initial idea was that people could enjoy the shows while commuting by public transportation, but then everyone stopped commuting.
The whole strategy was not compelling enough to get consumers to open their wallets, especially with intense competition between streaming services offering more features and / or deeper catalogs at comparable prices. But to put Quibi shows on real TV for free while using a streaming channel that has an audience of nearly 62 million people and uses increasingly sophisticated advertising technology? It might just work.