In addition to AT&T’s (NYSE:T) HBO Max and Comcast’s (NASDAQ:CMCSA) Peacock, Quibi is another video streaming service launching this spring. Google (NASDAQ:GOOGL) is playing a major role in the launch of Quibi.
Quibi, a new type of video service, targets Millennials with short videos not longer than ten minutes. That format makes it distinct from the likes of Netflix (NASDAQ:NFLX) and Disney+, which offer longer-form programming. Also, Quibi is designed specifically for mobile devices. Quibi has raised more than $1.0 billion from a pool of deep-pocketed investors including Chinese e-commerce giant Alibaba (NYSE:BABA), Walt Disney (NYSE:DIS), Sony (NYSE:SNE), AT&T’s WarnerMedia, and Comcast.
Google’s roles in the Quibi launch
Google has its own video streaming services: YouTube, YouTube Premium, and YouTube TV. However, that hasn’t stopped Google from supporting Quibi, a possible competitor. Here are three ways Google is supporting Quibi:
- Quibi will rely on Google’s cloud computing platform for content delivery, CNBC reports. Therefore, Quibi is joining Netflix and Spotify (NYSE:SPOT) as streaming services using Google’s cloud platform. The addition of Quibi as a cloud customer comes as Google aims to beat Microsoft (NASDAQ:MSFT) in the global cloud computing market. Google also counts on the cloud business to diversify its revenue sources. Currently, advertising sales contribute more than 80% of revenue at Google parent Alphabet. As Google’s ad business is facing headwinds, such a high exposure to the market poses a risk. Therefore, the company is working to diversify its revenue sources outside advertising.
- In addition to providing the cloud infrastructure for delivering Quibi content, Google will work to optimize viewing of Quibi videos on its Pixel smartphones.
- Moreover, Google has joined as one of Quibi’s early advertising customers. The others are Walmart, Procter & Gamble (NYSE:PG), and PepsiCo (NYSE:PEP).
Service to offer two plan options
Quibi is mainly a subscription video service in the mold of Netflix and Disney+. Unlike Netflix, though, Quibi will feature commercials that subscribers can choose to avoid. For that reason, Quibi pricing will start at $4.99 per month for a plan that requires subscribers to view ads, and $7.99 per month for an ad-free experience. Netflix plans start at $8.99 per month and offer an ad-free experience, and Disney+ costs $6.99 per month. Google’s YouTube service is free with ads.