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Quibi’s failure is a bad omen for T-Mobile’s video plans

The mobile carrier once heralded Quibi as "the next big thing" — and hasn't had much luck with other video initiatives, either.

Quibi CEO Meg Whitman and T-Mobile CEO Mike Sievert

Better days: T-Mobile CEO Mike Sievert joined Quibi CEO Meg Whitman on stage at CES this year.

Photo: Janko Roettgers/Protocol

Quibi's shutdown announcement this week has been widely panned as the inevitable end of a service that never made much sense to begin with, much less during the pandemic. However, the company's demise is also a notable failure for T-Mobile, which was one of Quibi's biggest boosters, and even footed the bill for some of its customers as part of a "Quibi on Us" promotion.

"Quibi has been a strong partner with a unique mobile-first vision, and we're sorry to hear they will be winding down operations," a spokesperson told Protocol on Thursday. "Obviously, we will continue to monitor and ensure our customers with Quibi on Us are supported during this period and through any next steps needed."

T-Mobile's embrace of Quibi hasn't been the telco's only miscalculation in the media and entertainment space. It also comes just as T-Mobile appears to gear up for another video service announcement next week.

When incoming T-Mobile CEO Mike Sievert joined Quibi executives on stage at CES this year, he was full of praise about the mobile video service. "Quibi's the next big thing, and we're delighted to be a part of it," Sievert told a few dozen journalists and industry insiders. Video, Sievert told the crowd, was already responsible for more than half of the data consumption on T-Mobile's network, and 80% of the video viewed by its customers was short-form content from services like YouTube and TikTok.

Quibi critics have long argued that this was essentially an argument against the service: Consumers were already busy watching clips for free, and there was little reason for them to pay for a premium version, walled off from the social networks that have become a daily habit for Quibi's target audience.

Quibi's execs on the other hand contended that the typical YouTube and TikTok fare wasn't good enough, and that a combination of recognized talent and big budgets would be able to win over millions of viewers. Millions that Sievers promised to deliver through a bundled partnership, complete with in-store promotions. "We're gonna go big," he said. "We're gonna bring it to our 68 million customers."

Financial details of the partnership were never disclosed. However, it's safe to say that T-Mobile did not deliver 68 million customers to Quibi. That's in part because the promotion, which promised T-Mobile customers free access to Qubi's $4.99 subscription tier, was only available to a subset of consumers who had two or more lines with the carrier. Consumers also had to seek out the deal and activate it through T-Mobile's app, adding further friction.

The telco's Quibi partnership was modeled after its promotional deal with Netflix, which first launched in 2017. Back then, the team-up was widely seen as disruptive, as it promised eligible T-Mobile customers free access to Netflix's HD plan, priced $10 per month at the time.

Things got a little more complicated when Netflix decided to raise its prices in 2019, and T-Mobile wasn't willing to cough up the difference. Since then, the carrier's "Netflix on Us" promotion features a hodge-podge of different plans and options, including a free standard-definition tier, and an option to pay $2 out of pocket to stream in HD.

T-Mobile's most puzzling foray into media to date has been its late 2017 acquisition of Layer 3, a small pay TV service that set out to reinvent the cable experience without changing the industry's core business model. T-Mobile shelled out $325 million for Layer 3, which at the time had just 5,000 paying customers.

The company has since rebranded Layer 3's service as TVision, a TV service that delivers a cable-like bundle starting at $100 a month plus taxes. In many ways, it's a very Quibi-like product-market-fit: Consumers have been ditching pay TV by the millions, and replaced expensive bundles with much more affordable combinations of Netflix, Hulu and Amazon Prime. But T-Mobile chose to ignore those signs, and instead simply built a slightly-better-looking interface for its still very expensive service.

"TVision is #Undisruptive," noted Lightshed Partners analyst Walter Piecyk at the time. "Who would buy this?"

Now, T-Mobile is looking to take the next step on its journey to become a media company. On Thursday, the company teased an upcoming TV-themed Uncarrier announcement for next week, complete with a video of a customer, played by Rashida Jones, calling up her cable company to complain about fees, and Sievert quipping: "You know what? It's time."

T-Mobile's next iteration of its TV service is likely going to be based on an Android TV dongle that has surfaced in regulatory filings in recent weeks. There's been no word yet on the pricing of the new service, or the kind of programming it will offer — but if T-Mobile's big bet on Quibi is any indication, the company will have its work cut out to find a proper market fit.

Protocol | China

China’s era of Big Tech Overwork has ended

Tech companies fear public outcry as much as they do regulatory crackdowns.

Chinese tech workers are fed up. Companies fear political and publish backlashes.

Photo: Susan Fisher Plotner/Getty Images

Two years after Chinese tech workers started a decentralized online protest against grueling overtime work culture, and one year after the plight of delivery workers came under the national spotlight, a chorus of Chinese tech giants have finally made high-profile moves to end the grueling work schedules that many believe have fueled the country's spectacular tech boom — and that many others have criticized as exploitative and cruel.

Over the past two months, at least four Chinese tech giants have announced plans to cancel mandatory overtime; some of the changes are companywide, and others are specific to business units. ByteDance, Kuaishou and Meituan's group-buying platform announced the end of a policy called "Big/Small Week," where a six-day workweek is followed by a more moderate schedule. In early June, a game studio owned by Tencent rolled out a policy that mandated employees punch out at 6 p.m. every Wednesday and take the weekends off.

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Shen Lu

Shen Lu is a reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.

Over the last year, financial institutions have experienced unprecedented demand from their customers for exposure to cryptocurrency, and we've seen an inflow of institutional dollars driving bitcoin and other cryptocurrencies to record prices. Some banks have already launched cryptocurrency programs, but many more are evaluating the market.

That's why we've created the Crypto Maturity Model: an iterative roadmap for cryptocurrency product rollout, enabling financial institutions to evaluate market opportunities while addressing compliance requirements.

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Caitlin Barnett, Chainanalysis
Caitlin’s legal and compliance experience encompasses both cryptocurrency and traditional finance. As Director of Regulation and Compliance at Chainalysis, she helps leading financial institutions strategize and build compliance programs in order to adopt cryptocurrencies and offer new products to their customers. In addition, Caitlin helps facilitate dialogue with regulators and the industry on key policy issues within the cryptocurrency industry.
Power

Brownsville, we have a problem

The money and will of Elon Musk are reshaping a tiny Texas city. Its residents are divided on his vision for SpaceX, but their opinion may not matter at all.

When Musk chose Cameron County, he changed its future irrevocably.

Photo: Verónica G. Cárdenas for Protocol

In Boca Chica, Texas, the coastal prairie stretches to the horizon on either side of the Gulf of Mexico, an endless sandbar topped with floating greenery, wheeling gulls and whipping gusts of wind.

Far above the sea on a foggy March day, the camera feed on the Starship jerked and then froze on an image of orange flames shooting into the gray. From the ground below, onlookers strained to see through the opaque sky. After a moment of quiet, jagged edges of steel started to rain from the clouds, battering the ground near the oceanside launch pad, ripping through the dunes, sinking deep into the sand and flats.

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Anna Kramer

Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

People

Facebook’s push to protect young users is a peek at the future of social

More options, more proactive protections, fewer one-size-fits-all answers for being a person on the internet.

Social media companies are racing to find ways to protect underage people on their apps.

Image: Alexander Shatov/Unsplash

Social media companies used to see themselves as open squares, places where everyone could be together in beautiful, skipping-arm-in-arm harmony. But that's not the vision anymore.

Now, Facebook and others are going private. They're trying to rebuild around small groups and messaging. They're also trying to figure out how to build platforms that work for everyone, that don't try to apply the same set of rules to billions of people around the world, that bring everyone together but on each user's terms. It's tricky.

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Power

Who owns that hot startup? These insiders want to clear it up.

Cap tables are fundamental to startups. So 10 law firms and startup software vendors are teaming up to standardize what they tell you about investors' stakes.

Cap tables describe the ownership of shares in a startup, but they aren't standardized.

Illustration: Protocol

Behind every startup, there's a cap table. Startups have to start keeping track of who owns what, from the moment they're created, to fundraising from venture capitalists, to an eventual IPO or acquisition.

"Everything that happens that is a sexy thing that's important to the tech world, it really is something having to do with the cap table," said David Wang, chief innovation officer at the Wilson Sonsini Goodrich & Rosati law firm.

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Biz Carson

Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.

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