Telecommunications giant T-Mobile has agreed to partner with Quibi, a Hollywood start-up that plans to distribute bite-size entertainment designed for millennials.
Under the arrangement, Quibi’s upcoming streaming service will be part of a T-Mobile offering, giving it a broad distribution platform as it prepares to launch in April. T-Mobile, the third-largest mobile phone network with 83.1 million customers, plans to merge with Sprint, the largest wireless merger in the industry’s history.
“Quibi will deliver premium video content for millennials on a technology platform that is built exclusively for mobile, so a telecommunications partner like T-Mobile, with their broad coverage today and impressive 5G road map, is the perfect fit,” Quibi Chief Executive Meg Whitman said in a statement.
The pact marks a significant step in Quibi’s plans to deliver premium content viewed in 10 minutes or less to mobile phone users.
Bellevue, Wa.-based T-Mobile has been looking for entertainment partners as its rivals expand their footprints in Hollywood. Texas-based AT&T last year acquired Time Warner Inc. for $85 billion, and its entertainment division will launch a new streaming service, HBO Max, next year. Verizon has also delved into streaming, launching its Go90 video platform in 2015 only to shut it down three years later.
“Of course Quibi and T-Mobile are working together - we’re two mobile-centric disruptors committed to challenging the status quo and giving customers incredible experiences,” T-Mobile CEO John Legere said in a statement.
Details of the partnership, such as whether T-Mobile customers will receive discounts or whether the Quibi app will be pre-installed on their phones, have yet to be determined. Financial terms were not disclosed.
A representative for AT&T declined to say whether the company had also considered partnering with Quibi and Verizon did respond to requests for comment. WarnerMedia is among the studios participating in a second round of financing for Quibi, said a person close to the company. But AT&T is said to be more focused on WarnerMedia’s HBO Max streaming service.
Launched by veteran film mogul Jeffrey Katzenberg and Whitman, Quibi has made waves after raising $1 billion in financing from Disney, WarnerMedia and other major studios and investors. In the last year, it has gone on a hiring spree and made a flurry of announcements for upcoming projects with prominent filmmakers and news organizations. Company executives have said they expected to raise an additional $500 million this fall.
Quibi recently announced it will air a new six-minute “60 Minutes"-produced program, two English-language news shows from Telemundo, and two celebrity news shows from TMZ. This week, Quibi said the Weather Channel and Entertainment Weekly will also be providing programming.
But Quibi, which will charge about $5 a month with ads and $8 without ads, will face an increasingly crowded video streaming market when it launches next April. The space is already dominated by large subscription platforms such as Netflix and Amazon Prime Video, as well as free, mostly ad-supported sites such as YouTube and Facebook.
Quibi’s target audience is people ages 25 to 35, and its larger demographic could include people ages 18 to 44.
Its videos fall into three categories: long-form narratives distributed to consumers in short chapters; alternative content, which includes reality, documentaries and food shows; and so-called Daily Essentials, which include daily news such as morning and evening shows from NBC News that target millennials.
The company plans to amass more than 7,000 pieces of content in its first year. Among the upcoming projects is a modern take on the 2003 romantic comedy “How to Lose a Guy in 10 Days,” which is in development with Paramount TV. Quibi has also lined up major filmmakers including directors Antoine Fuqua, Guillermo del Toro, Sam Raimi and Steven Spielberg.
Quibi is using features on mobile phones to stand out from other streaming services and enhance the stories on its platform. For example, some shows may allow users to change their perspective by shifting how they hold their mobile phones. At least one program, “Spielberg’s After Dark,” is timed to appear on the service only after sundown.
The company aims to make money through subscriptions and advertising. It said that in its first year it will have an ad inventory worth $150 million and that such brands as Google, Walmart and Procter & Gamble have signed on.
Some analysts have been skeptical whether Quibi will be able to succeed where past efforts to delve into mobile-first premium content have had lackluster results. Last year, Verizon shut down its Go90 platform, which targeted millennials with programming that included short, episodic content. Analysts said a lack of a large enough audience led to Go90’s demise.