Goodbye Quibi, we hardly knew you! Actually, I didn’t know Quibi at all, but the streaming platform just called it quit today after a very short existence.
Described as an over-the-top short-form entertainment platform for mobile devices, Quibi was founded by Hollywood producer Jeffrey Katzenberg about 2 years ago and was led by former HP CEO Meg Whitman. It was targeting a young demographic with ‘quick bites’ (i.e. the moniker quibi) or movie-quality 10-minute episodes, delivered every day on subscribers’ phones. The idea was ‘on-the-go’ very short content for the unfocused youth, who can only focus on a small screen for a short amount of time.
After raising $1.75 billion ahead of its launch in April, the platform attracted top Hollywood stars for its shows (Chrissy Teigen and Idris Elba) and its investors included a long list of major Hollywood film studios, TV companies, telecommunications companies, technology companies, banks, such as The Walt Disney Company, 21st Century Fox, NBCUniversal, Sony Pictures, Time Warner, Viacom, eOne, Lionsgate, MGM, Madrone Capital, Goldman Sachs, JPMorgan Chase, Alibaba Group, Liberty Global, TV, BBC Studio…
Sadly, the company announced today that Quibi shuts down, 6 months after its launch, while will returning the remaining funds to investors.
‘While we have enough capital to continue operating for a significant period of time, we made the difficult decision to wind down the business, return cash to our shareholders, and say goodbye to our talented colleagues with grace,’ Whitman said in a press release. ‘We continue to believe that there is an attractive market for premium, short-form content. Over the coming months, we will be working hard to find buyers for these valuable assets who can leverage them to their full potential.’
The service was not doing very well and had failed to sign up subscribers (at $4.99-per-month), and even though ambitious projections were already predicting 7 million subscribers for its first year, Quibi had only collected 500,000 subscribers. It was a bit surprising considering that Quibi had launched just weeks after the coronavirus pandemic hit the U.S., leaving many people with a lot of time on their hands. While Netflix saw its subscriptions increase during the pandemic, a new platform like Quibi was not embraced by the out-of-job population or anyone else. However, Katzenberg blamed Quibi’s failure on the timing of the launch: ‘Quibi is not succeeding. Likely for one of two reasons: because the idea itself wasn’t strong enough to justify a standalone streaming service or because of our timing. Unfortunately, we will never know but we suspect it’s been a combination of the two. The circumstances of launching during a pandemic is something we could have never imagined but other businesses have faced these unprecedented challenges and have found their way through it. We were not able to do so.’
This is a short and ephemeral story, according to Deadline, only $350 million will be returned to investors from the roughly $1.8 billion in capital that was raised, and it’s an incredible loss. How could Katzenberg, Whitten, media companies, and banks have been so trusting? Even worse, despite an attempt to sell Quibi’s catalog of content to Facebook and NBCUniversal to avoid a bigger loss, Quibi could not sell and even faced a lawsuit from the interactive video company Eko, which claimed Quibi violated Eko’s patents for mobile video technology.
The entire thing looked doomed from the start, huge investments and plenty of confidence but no subscribers in return despite a pandemic that should have attracted an audience.
‘Quibi was founded to create the next generation of storytelling,’ Katzenberg said in a press release. ‘We have assembled a world-class creative and engineering team that has created an original platform fueled by groundbreaking technology and IP, enabling consumers to view premium content in a whole new way. The world has changed dramatically since Quibi launched and our standalone business model is no longer viable. I am deeply grateful to our employees, investors, talent, studio partners, and advertisers for their partnership in bringing Quibi to millions of mobile devices.’
I am certain the technology was great but did they have the promised storytelling? Then, don’t we have enough content and enough apps already? What was the appeal exactly? Watching a movie on my phone had never been tempting to me, and who has the time to watch the amount of content already produced on all these platforms?
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