Quibi could score as TV ad budgets shift toward digital

Quibi costs $4.99 with ads and $7.99 without ads but it comes with a 90-day free trial for customers who sign up before the end of April. (Quibi)

Quibi, a new mobile-focused subscription streaming service, launches today and could be in prime position to snatch ad dollars that are floating away from traditional TV.

UBS released new research based on a survey of 40 advertising industry executives and found that, on a weighted basis, over the next 24 months around 58% of advertisers expect to shift ad dollars from TV to digital.

Despite the current uptick in TV viewership due to COVID-19, the analyst firm said the longer-term secular decline of TV viewership was a more common rationale for those shifting budgets to digital (particularly as new DTC services come to market).

“When shifting from TV to digital, roughly 40% of buyers are willing to shift to non-video online channels (i.e. social/search etc.), down slightly from prior surveys. Survey respondents appear more receptive to shifting budgets to other forms of online video, perhaps due to upcoming ad-supported DTC launches including Comcast's Peacock or Quibi,” wrote UBS analyst John Hodulik in a research report.

RELATED: T-Mobile gives free year of Quibi to subscribers

Quibi will feature ads for 25 brands from 10 different ad partners: Progressive, Discover, General Mills, Procter & Gamble, AB InBev, Taco Bell, Pepsi, T-Mobile, Google and Walmart.

Tal Chalozin, co-founder and CTO of video advertising company Innovid, said brands may see Quibi has an appealing new advertising option for cutting through the noise, but that the service will need companies to buy in on Turnstyle, Quibi’s format that shifts content framing from vertical to horizontal depending on how the user is holding their device.

“Creating a new format for ads isn’t something that goes unnoticed. When Snapchat launched its vertical video 10-second ad format, that was a heavy lift to get marketers to jump on board. Snapchat needed to invest in substantial creative resources, education and aid to get marketers to buy-in. Quibi will need to do the same,” Chalozin said.

Quibi launched today with several original series and films, all delivered in 10-minute episodes. Quibi’s content is a mix of scripted, unscripted, documentaries along with daily news, sports and pop culture programs. The service costs $4.99 with ads and $7.99 without ads but it comes with a 90-day free trial for customers who sign up before the end of April. T-Mobile is also giving away a free year of Quibi to many of its wireless customers.