Katzenberg’s mobile TV service plans spending spree on content | Major Businesses | Business
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Jeffrey Katzenberg plans to spend roughly $496.5 million to buy programming for his mobile video service prior to its launch in late 2019.

katzenberg 11 dec 2018Quibi, formerly known as New TV, expects to reach 11 million, 20 million or 70 million subscribers in five years, according to different scenarios in a pitch deck reviewed by Digiday. For the “base case” of 20 million, the plan is to spend $600 million on content in the first year and ramping up to as much as $978 million in the fifth year.Quibi, which is headed by CEO Meg Whitman, plans to offer a $5-per-month ad-supported tier and an $8-per-month ad-free option. The deck expects subscriptions to account for 59.5% of revenue in the 20 million user scenario.

Earlier this year, Quibi officially announced a $1 billion financing round, led by financial giants and all of the major studios, including Disney, Lionsgate, MGM, Fox, WarnerMedia, Viacom and NBCUniversal.

Katzenberg has said that most of that production effort will be focussed on short-term fare. However, even though the shows will each only be a few minutes long (and no more than 15), the cost for some series will rival that of a full-length Netflix series, at about $5 million to $6 million per hour, with the same level of quality.

“We’re not asking people to tell 10-minute stories; we’re asking them to tell two- to four-hour stories,” said Katzenberg, speaking at a Variety conference. “We’re not giving [filmmakers] some tight little box and asking them to produce, [we’re] just giving them guardrails and saying ‘experiment.’”

In Quibi’s pitch deck, the company said that “super-premium” scripted and unscripted original series would on average cost around $125,000 per minute (scripted) or $50,000 per minute (unscripted). There will also be network, cable and digital partner exclusives, and news and sports programming, which would cost around $10,000 per minute.