Quibi quits after six months
October 22, 2020
Quibi, the short-form mobile content platform, is closing down after just six months, becoming the first big casualty of the streaming era. The company is expected to hold a conference call later today (October 23rd) to outline the decision to investors.
Reports emerged last month that the platform – founded by US media co-founder and former Disney executive Jeffrey Katzenberg – was considering various strategies after a spluttering start has resulted in a failure to meet subscriber targets. A sale had been on the table, but Apple, WarnerMedia, and Facebook are all said to have declined.
Co-founder Meg Whitman, former CEO of HP, commented: “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.”
Reports say Quibi is planning to return to investors the remaining $350 million of the $1.75 billion it had raised.
That capital had come from investors including Alibaba, Disney, Viacom, all the big Hollywood studios, Liberty Global, Goldman Sachs, JPMorgan and the Walton family, the founders of Walmart.
The company spent hundreds of millions of dollars to enlist top directors such as Steven Spielberg, as to make “movie-quality” scripted shows and documentaries, daily news and sports. The service was free for 90 days, before charging $8 a month, or $5 a month with advertisements.
Investors had hoped Quibi could secure about 20 million subscribers over five years and generate $2 billion in revenue, with roughly a third coming from advertising.
Quibi (‘Quick Bites’) specialised in offering short form content (no video is longer than 10 minutes) to be consumed on the go via mobile screens. With millions stuck at home, Katzenberg has gone on record several times blaming the pandemic for the failure of Quibi.
Others, including, Advanced Television, saw it as deeply flawed concept from the outset.