It’s dinnertime midweek at the celebrity-heavy Los Angeles restaurant Craig’s, and Jeffrey Katzenberg and Meg Whitman are holding court in a highly visible corner booth. If Hollywood were a high school cafeteria, theirs would be the cool kids’ table. Other diners smile and nod in their direction. The record executive Tommy Mottola stops by. The restaurant’s owner, Craig Susser, leans in to shake hands. “I haven’t heard much about you lately,” says Susser.
“Are you doing anything?” All laugh uproariously. The joke’s on whoever thought gobs of money and a pair of expired executive titles would force these two into retirement.
At first glance, Whitman and Katzenberg seem a bit like the oil and vinegar that dress the $16 kale salad at this joint. She made her name in left-brain Silicon Valley, running eBay and then Hewlett-Packard. He looms large over right-brain Hollywood as the former chairman of Walt Disney Studios and longtime CEO of DreamWorks Animation. She ran for governor of California as a Republican. He’s raised big bucks for Democrats. She wears paisley scarves; he prefers Stan Smiths. It’s kind of hard to imagine them enjoying a meal together, let alone joining forces to create Quibi, a short-form video platform—its name is short for “quick bites”—that has raised a billion dollars from the likes of Disney, Fox, Time Warner, and NBCUniversal, all before writing a line of code or releasing a snippet of video.
Yet this odd couple finish each other’s sentences like friends who have known each other for decades, which, in fact, they have. They met in 1989 at Disney, where Whitman worked in the entertainment giant’s famed strategic-planning group while Katzenberg was busy reviving Disney’s motion picture arm. Katzenberg claims Whitman was the only business type he enjoyed talking to back then. Years later, when she was CEO of eBay, he asked her to join the board of DreamWorks Animation. Whitman stayed for five years before stepping down for her 2010 gubernatorial campaign. (Katzenberg’s reaction upon learning Whitman would run as a Republican: “Are you fucking kidding me?”) She was trounced by Democrat Jerry Brown.
So when HP announced in late 2017 that Whitman would be leaving her latest corporate gig, Katzenberg, who had just started raising money for a then-unnamed video venture, called within minutes to ask what she was up to. Despite having vied months earlier for the job of running troubled ride-hailing startup Uber, Whitman told Katzenberg she was thinking of taking some time off. “I said, ‘No, I mean, what are you up to tomorrow night?’ ” Katzenberg recalls. The next day he flew up to the Bay Area for a three-and-a-half-hour dinner at Nobu, a high-end Japanese restaurant, to pitch Whitman on running his new company. “I told him, ‘You know what, this might be kind of fun,’ ” says Whitman.
“Fun,” to these two overachievers, is a plan so grandiose that success means nothing less than becoming the entertainment industry’s next big thing. Whitman, the new company’s CEO, and Katzenberg, its chairman, aspire for Quibi to be to short-form video—think: 10 minutes or less and viewed on a phone—what Kleenex is to tissues and Google is to search. “We’ll actually create the next chapter of film narrative,” says Katzenberg, never short of ambition. “Five or 10 years from now, we’ll look back and go, ‘There was the era of movies, there was the era of television, and there’s the era of Quibi.’ ”
Confident but not naive about the magnitude of their gambit, the two are out hustling like interns, pitching until their voices grow hoarse. Quibi hasn’t even launched its service—it plans to by the end of the year. But thanks to the prodigious networking ability of its two top dogs, it already has landed impressive talent, from A-list directors to industry big shots like journalist Janice Min and music executive Doug Herzog.
In fact, Quibi’s most important selling point may just be the juice Katzenberg and Whitman bring to the project. Lena Waithe, an Emmy Award–winning actress, producer, and screenwriter, attributes her interest in Quibi to “Katzenberg and his brand and the fact that he’s proven himself time and time again.” She’s developing a documentary series for Quibi about sneaker culture that she had been close to selling to a streaming service when Katzenberg swooped in. As for Whitman, “her network is gigantic, everybody trusts her, and everybody likes her,” says venture capitalist Marc Andreessen, a fellow HP board member.
Reputations alone won’t guarantee Quibi’s success, of course. The company seeks to capture 18- to 35-year-olds during their “in-between” moments: on the train to work, waiting in line at Starbucks, boarding a flight. Yet its business model is to sell these youthful viewers subscriptions in an era of ubiquitous free video. “Trying to create what’s essentially ‘lean back’ content, even if it’s shorter, and delivering that to mobile platforms exclusively is a nonstarter,” says Paul Verna, a video analyst with the consulting firm eMarketer. “The people who are going to be the audience for this have no idea who Jeffrey Katzenberg or Meg Whitman is. They don’t care, and they don’t want to pay.”
If it seems audacious for two relative dinosaurs to think they’ve cracked the code for what people young enough to be their grandchildren want to watch—Katzenberg is 68, and Whitman is 62—it’s also an opportunity for each to rewrite their legacies. Katzenberg started raising money for Quibi shortly after selling DreamWorks Animation to NBCUniversal in 2016, a move seen as a defeat in Tinseltown even though he walked away with $420 million. And Whitman, a billionaire since her eBay days, took the HP job only after her short-lived political career flamed out and HP’s stock sputtered under her watch. They’ve both scaled mountains, yet each has something to prove.
Quibi sprang from Katzenberg’s fertile mind, and it’s the crown jewel of his WndrCo, a consumer technology holding company he founded in 2017. WndrCo incubates its own startups (such as Quibi) and invests in existing businesses, like The Infatuation, a digital dining guide, and AnchorFree, which makes security software. Katzenberg modeled WndrCo after IAC, the media and technology holding company helmed by his mentor, Barry Diller. (Katzenberg moved from New York to Los Angeles in 1977 to answer the phones of Diller, then CEO of Paramount Pictures.)
Just as IAC was a pioneer at applying Internet technology to traditional media, Quibi aims to update old-school video techniques for the mobile age. Leaving aside the movie trailers, music videos, and commercials that have been with us for a long time, short-form video has until now fallen into two categories: user-generated content, like the cat chronicles that populate YouTube, and more-produced fare, made for a fraction of what traditional television would cost. The user-generated content succeeds because of the element of surprise, the perceived scrappiness of the subjects behind and in front of the camera. Low-cost videos seen on services like Facebook Watch bring to mind the sale rack of a T.J. Maxx: There are some gems to be found, sure, but more junk than not.
This kind of content can attract eyeballs, but it’s relatively undesirable to advertisers, and it’s nearly impossible to get consumers to pay for it. “If mobile video is all you’re doing, you’re limiting yourself,” says Verna, the eMarketer analyst. “If you look at Facebook Watch and Instagram TV, they’re having enough trouble getting traction for their programming, and they’re free.” YouTube, for example, announced in November that it will abandon a subscription-based model for its original content and instead make all of its videos free.
Quibi’s proposition is to take the short-form market upscale. The company plans to charge $5 a month for viewing with limited ads and $8 a month for an ad-free version. By charging for access, Quibi reckons it can pay around $100,000 a minute for its premium shows. That’s far less than the $200,000 to $300,000 a minute that Katzenberg says Netflix and HBO pay for top-tier fare but more than what producers are paying for existing short-form videos. “In order for this to succeed, you need quantity of quality,” he says.
Quibi sold stakes to 10 film and TV companies. According to sources, the 10 studios invested about $25 million each in the startup, which wouldn’t confirm the amount—enough to give each a stake in its success. The aim of such deals, in part, is to allow Quibi to tap the studios’ creative talent and resources.
Fighting back against the tech companies that have invaded Hollywood is another incentive for Quibi’s entertainment-industry backers. “Google, Facebook, Snap, and others have wanted people to make short-form content for them,” says Peter Rice, president of 21st Century Fox. “But there’s been no real business model. It was for the greater glory of those platforms only.”
Quibi’s near studio-grade budgets have succeeded in reeling in acclaimed creative collaborators too. Oscar-winning director Guillermo del Toro, Spider-Man director Sam Raimi, Get Out producer Jason Blum, Training Day director Antoine Fuqua, and Twilight director Catherine Hardwicke are all developing series for Quibi.
Besides the money, why would box-office stalwarts want to make 10-minute videos for cell phone screens? “Our short attention spans demand this,” says Hardwicke, whose Quibi series follows a teenage girl grappling with the problems of the future as well as the known pains of adolescence. Quibi creations will be short, but a series might run for any number of episodes. So a story that might have been told on a film screen in 120 minutes can be cut down and doled out over the course of two weeks. “We love the idea of ‘one a day’ because we think it builds watercooler,” says Katzenberg, using Hollywood shorthand for casual workplace conversations. “The problem with streaming is that on the one hand, it has a lot of convenience; you’re in control of it. But on the other, you and I are never ever watching the same thing.” Unlike Netflix shows, Quibi programs will be released episodically and then be available on demand, a hybrid of appointment viewing and bingeing.
Given that it’s a brand-new offering, Quibi also is dangling an inducement in the form of a shorter period in which it has exclusive rights to the content it’s buying. For two years, Quibi retains the rights to broadcast and distribute the content it orders. After that, producers can stitch together the bites and shop them elsewhere. “It’s a big selling point,” says Blum, the Get Out producer. “It’s harder and harder to own your own IP, especially with the streamers. Netflix and Apple, they want to own all the rights. In the movie business, it’s impossible unless you’re a distributor.”
That’s all good and fine, provided that Quibi succeeds in signing up customers, which will be the focus of its marketing efforts later this year. If it can’t, its clever approaches to content creation won’t much matter. “If they don’t get the subscribers, and the cards are stacked against them getting subscribers, your series won’t be a hit, and who’s going to want to buy it?” wonders Dan Rayburn, who tracks streaming media for the consultancy Frost & Sullivan. “You don’t see people clamoring to rebroadcast stuff from go90,” he says, referring to Verizon’s mobile-video platform that went dark in July.
Whitman and Katzenberg show up at the same office every day, an unfussy steel-and-glass low-rise on a Hollywood side street. Whitman started at Quibi last March, after putting her home in the tony Bay Area suburb of Atherton up for sale and moving into a West Hollywood condominium. (She did manage to squeeze in a trip to Africa with her family between CEO posts.) Quibi is in a shared-office complex, similar to WeWork, with room to grow. Says Whitman: “We can Pac-Man our way as we get more people.”
Whitman has been doing a lot of recruiting and hiring in the months leading up to the intended launch toward the end of the year. “Right now, it’s super similar to eBay,” she says, which she joined in 1998, when the fledgling auction site had 30 employees. (Unlike Quibi, eBay already had revenues that were growing freakishly quickly when Whitman joined, which was one thing that attracted her to the job.) Quibi had 75 employees as of January, including a surprising number of entertainment-industry titans in their own right. These include Diane Nelson (former president of DC Entertainment), Doug Herzog (former president of Viacom Music and Entertainment), and Juan Bongiovanni, former director of digital marketing at Netflix. “Figuring out how we’re going to work together, hiring the right people, the company being a different company every month—it’s super familiar to me,” says Whitman.
On a recent morning, Whitman leads a tour of the second-floor space Quibi has claimed, gliding past her standing desk (a paperback copy of her leadership book, The Power of Many, sits by the keyboard), past an empty room that the finance team is about to move into, explaining all her expansion plans. On the way to the conference room—which Quibi is sharing with another tenant—Whitman waves to Janice Min, former Hollywood Reporter editor-in-chief who now oversees Quibi’s content, and pauses for one last tour stop. She opens a blond-wood door and fumbles for the lights, revealing a screening room with cushy, oversize armchairs. A screening room isn’t an unusual tenant improvement in Hollywood. But Quibi has no use for the setup. “We’ve had all-employee meetings here,” Whitman says. “When we first saw it, someone said, ‘Oh, look, we can watch our product in here,’ and I said, ‘Yeah, we’re going to be sitting on these couches with our phones. We’re not putting our stuff on that.” She points derisively at the screen and flicks off the lights.
Whitman, intent on proving herself as a woke techo-entertainment executive, is walking the mobile content walk. She claims, improbably, that she no longer streams TV shows or movies on anything larger than a smartphone screen. “I had my brightness slider all the way up while watching Bodyguard,” the (long-form) British terrorism thriller distributed by Netflix, “over the weekend, and it was still dark,” she says. “And that’s because the original film was not shot with enough contrast.” While Katzenberg reels in A-list talent to create content, Whitman is figuring out how the company can make mobile viewing more immersive, more encompassing, more like the experience one would have in that screening room she uses only for meetings. Beyond boosting film brightness, she wants to optimize sound. “While you’re on the bus, commuting, it’s quite quiet, and suddenly you get out and there’s all this noise, but you still want to watch,” she says. “You know what drives me crazy? When they make the flight announcements, and you can’t hear a thing. It’s so loud, and it goes on for a long time.”
Quibi does not yet have a media player to test, and there’s no “sizzle reel” to entice would-be collaborators. Instead, it has Katzenberg and Whitman, who have been tooling around Hollywood with a spiral-bound, 32‑page presentation, selling roomfuls of producers, executives, and talent agents on why they and their clients should carve out time for Quibi. They have proved to be a curiosity. “Typically, when we have someone come up and tell us what’s happening at Warner Bros. or HBO, you get 20 people in a room,” says Ari Greenburg, a partner at the William Morris Endeavor talent agency. “This was a single email, and 150 people showed up.”
Lately, Quibi has generated enough industry buzz that creatives are coming to pitch. One morning in November, actress Zoe Saldana (Avatar; Avengers: Infinity War) glides into the shared conference room with her sisters, Cisely and Mariel Saldana. Katzenberg and four Quibi staffers follow, taking seats around a big square table illuminated by a light fixture that looks like a giant white lima bean.
At first it’s the Saldanas who are in full-on pitch mode, talking about how Latinx millennials like themselves are “fed up with the maids and the gangsters and the narcos.” “I want to see a Riverdale with a multicultural cast and have it be super-elevated,” says Zoe, referencing the subversive TV take on the Archie comics characters. The Saldana sisters’ production company, Cinestar Pictures, has a number of multicultural, millennial-leaning show concepts looking for a home, and they lob a few ideas at the table.
But about 15 minutes into the meeting, Katzenberg takes over, describing one star-laden series after the next. He drops names like loose change, talking about how he’s signed on Justin Timberlake to ask famous musicians about the song that inspired them to get into the industry, then do a duet of it. He’s persuaded Zac Efron and his brother to go to a remote corner of the earth and attempt to survive without food, water, and technology for a to-be-determined number of days. (Katzenberg says he told them, “We’re only going to do this if you’re in real danger.”)
He’s wrangled Chris Rock to narrate wildlife mini documentaries produced by National Geographic that sound like a mashup of Planet Earth and the Planet Earth spoof voiced by rapper Snoop Dogg. “It’s just sort of a circle of life of an animal, an elephant one week, a salamander the next week. It doesn’t really matter what the animal is,” Katzenberg says, shrugging. If there were a thought bubble above his head, it might read, “Who cares about the freaking animals? We got Chris Rock.”
As he begins to wrap up with Zoe and her sisters, Katzenberg leans into the table separating them with a plea: “We need you, we need your celebrity, we need your buddies. We need to get the stars, the people who mean something to this audience, on our platform.” “Like, in front of the camera?” Zoe asks, warily. “Absolutely,” says Katzenberg. The cool kids’ table, after all, relies on perception. What Katzenberg and Whitman need right now are known quantities who mean as much to Quibi’s target demographic as Quibi means to these two ambitious boomers.
A version of this article appears in the February 2019 issue of Fortune with the headline “Hollywood’s New Odd Couple.”