Jeffrey Katzenberg on launching Quibi during COVID-19 crisis

Jeffrey Katzenberg, founder of Quibi, speaks with Andy Serwer on the decision to maintain launching the short-form mobile streamer during the coronavirus crisis.

Video transcript

MYLES UDLAND: All right, welcome back to "Yahoo Finance Live." Myles Udland here in New York. Well, most of the economy is shut down. Everyone is staying at home and not working, but that has not stopped Jeffrey Katzenberg's latest project Quibi. Short videos, "quick bites" is I think what the name stands for. Andy Serwer, you talked to Katzenberg earlier today about the launch of this product, and-- and what a time for something that's had a lot of conversation around it for several months. But we are here April 6, and-- and Quibi is now live in the most unusual of times.

ANDY SERWER: Yeah, that's right, Myles. And, you know, for those of you who aren't familiar with Jeffrey Katzenberg, he's kind of a one-man whirlwind of Hollywood, a top executive at Walt Disney for many years and then one of the founders of Dreamworks. And then he and Meg Whitman teamed up to form this company Quibi, right, which is "quick bites," and launched right into the teeth of this coronavirus. Now if you had a restaurant chain that you were going to open up right now, you'd probably put it on a hold, but this is a whole different thing. And here's what he had to say about that.

We're in the midst of this terrible coronavirus pandemic. You decided to go ahead and launch, and I guess it makes sense because this is actually something that's very useful for people who are stuck at home, working from home, looking maybe for a break, looking for some entertainment.

JEFFREY KATZENBERG: Well, a bunch of things were factors in this, some of which we didn't know, well, we anticipated. And, you know, this is that old, you know-- you know, sort of two old things that I remember my mom always saying to me. You know, when they give you a lemon, make lemonade, you know, and adversity is the mother of invention. And so honestly, that's where we found ourselves. And so a couple of things. One, now, today, viewing mobile on our phones is up 60% over a month ago. So--

ANDY SERWER: Wow.

JEFFREY KATZENBERG: --being in home is actually-- and by the way, up much, much more than television viewing is, right? So everybody's been talking about TV and "Tiger King," which we're all watching, right, but viewing and watching mobile video has gone through the roof. And so the timing is actually pretty great in that regard. The other thing is, is that Quibi, from the very beginning, was designed to be a media platform, an entertainment platform, in which we would inform people, we would entertain them, and we would inspire them.

And I think when you see the content that these amazing filmmakers and brands have-- have delivered to us, they have actually exceeded my expectations and I think will exceed most other people's also. That's my hope anyway. And so what Meg and I, Meg Whitman, my partner in this, what we really decided was, if we were going to stay the course and come out now, the one thing that we should do is just change the business proposition and just give it to people free because this is a moment in time in which people are stressed and distressed, particularly economically.

So one, the good news or the good side of this is let's do something that's nice and generous and hopefully will add some escape and happiness to people. And on the other side of it, from a business, we're in this for the long haul. What we care about is what Quibi looks like six months, a year, two years from now. And, you know, we're a well-financed company. We can more than afford to just give it away to everybody for three months and let them enjoy it.

ANDY SERWER: Great stuff there. And, of course, we're working from home, we're talking to each other from our homes. And did you have to sort of finish or right before the launch do this from everyone's respective houses, right?

JEFFREY KATZENBERG: 100%. We-- our company, you know, went to work from home, I don't know, 23, 24 days ago. Very early on, the mayor of LA, you know, was very early and aggressive about sheltering in place. And so, you know, it took us to three days. But I have to say-- maybe it's because we have such a young workforce-- we very quickly pivoted to this, and it-- everybody has got Zoom and Slack. And, you know, honestly, it takes the personal connection, which I always loved so much, being around people.

You've known me for a long time. I am a people person. And so I miss being in the room, but I don't-- I don't believe we've missed a beat in terms of actually just keeping our business running. And, you know, we launched this thing today. It's a brand new app, a brand new user experience. So far, knock wood, it's been up and running without, you know, any real engineering or-- or challenges or problems, and so we're-- we're pretty excited.

ANDY SERWER: And so what's interesting, I think, you guys, if you try to use it, you can really see that it is benefiting from a new technology stack. Which is to say, you know, he put it up and he was just going like this with his phone, and it was going into, you know, horizontal and vertical without skipping a beat, it was full frame, it was beautiful. It looked really amazing. Because, you know, the question is here, do we really need more content?

I know that's what Myles is itching to answer. I mean, the answer is no, so it better be delivered in a really cool way, and it's got to be differentiated. I mean, by the way, he's got, like, every star in Hollywood on this thing, I mean, you know, and plus LeBron James and plus Chrissy Teigen, and, you know, everyone's got a little show. Who knows if it's going to work? But, you know, people have doubted Jeffrey before. I can say that.

RICK NEWMAN: Hey, Andy, have you watched any Quibis? And if you have, what are your reviews?

ANDY SERWER: I have not yet. I've watched the little promos. There's-- one of my favorite things, I think, is going to be Chrissy Teigen has a show called "Chrissy's Court," right? And I happen to-- I'm kind of a big fan of Chrissy Teigen, you know? And so she basically told Katzenberg, he said, how about doing a show with me? And she said, yeah, I'd like to. You know what show I really like, Jeffrey? I love "Judge Judy." I want to do my own "Judge Judy" show.

And so you can just imagine, I mean, this is a very opinionated person, Rick. And the-- the line of the show is, "Nothing is too small for Chrissy Teigen to consider." So-- so, I mean, I think it could be pretty amusing. Now whether that supports a $4.99 subscription price-- that's without ads, $7.99 with ads-- you know, we'll have to see. Or it's the other way around actually, right? It's $7.99 with ads, 4-- is that the way it would go? You tell me. Which way would it go?

RICK NEWMAN: Yeah, right, cheaper with ads.

ANDY SERWER: Cheaper with ads, right? Yes. Anyway, I don't know, Myles, what do you think? You ready for a little Quibi?

MYLES UDLAND: Look, if you're going to give me money to do something, sure. I mean, they-- they kind of just threw money at everybody, right? Jen, kind of sounds like that?

JEN ROGERS: I think that a lot of people are happy with the-- the paycheck from any of the streamers probably out there. Not that they are a screamer, which is my question, Andy. We are all at home. People are watching a lot. But they're going with this mobile only strategy in a time where I feel like I'm watching more things on bigger screens because I'm not commuting, I'm not sitting in a, you know, a doctor's office waiting for something. Do you think that they're going to eventually just become a regular app that can sit on Apple TV or Roku as well?

ANDY SERWER: I mean, I think they're really going to resist that. Two points. First of all, it surprised me, Jen, when he said people are on their phones more than watching linear TV, maybe not linear TV, but just watching content on their desktops or laptops or their iPads. He seemed to suggest the numbers showed people were on their phones more, which is a little counterintuitive, let's just say. They're also not letting you binge, OK? It's episodic. You-- you can cumulatively binge at the end, so that's interesting too.

I think that, you know, there are some models, though, Jen, where, you know, there is like sort of a-- a weak desktop option, and the one, of course, that comes to mind right away is Instagram, right? Like, Instagram, you can use it on desktop, but it's really not a great experience. It's sort of just a place holder that, like, if you have to, you can go there and use it.

But really, no one uses Instagram on the desktop. It is basically a mobile first, not mobile only, but mobile first. And so Quibi could end up being like that. They got a lot of money, so who knows, you know, what kind of runway and how long they'll see till they declare victory or fold the tent? But, you know, it'll be interesting to see.

MYLES UDLAND: I'll-- I'll just say this. I-- I know there's a lot of skepticism about it. I think there's a lot of questions about, [INAUDIBLE] app, will people develop the habit, and so on. You mentioned-- you mentioned Instagram. The ad load on Instagram and YouTube is just prohibitive. I mean, it makes the services almost unusable at times. So I think that the tolerance for adding more subscriptions is certainly expanding with consumers who would rather pay 5 bucks than be subjected to another clothing startup in their Instagram stories. But that is just my personal opinion on where the space is going. And like you said, Andy, a lot of money, big names there. Certainly, time will tell.