“We started with the idea to create the next generation of storytelling and because of you, we were able to create and deliver the best version of what we imagined Quibi to be,” the letter, posted through Medium, begins. “So it is with an incredibly heavy heart that today we are announcing that we are winding down the business and looking to sell its content and technology assets.”
It continues: “Our failure was not for lack of trying; we’ve considered and exhausted every option available to us.”
Following the company’s winding down and satisfaction of all liabilities, remaining funds will be returned to its investors as specified in its operating agreement.
According to the Wall Street Journal, which, along with The Information, first reported the news of the impending decision to wind down the business, the company hired a restructuring firm in recent weeks to evaluate its options, including shutting down its operations, which were recommended to Quibi’s board of directors this week.
Quibi reportedly held a call with its investors today (Oct. 21) to provide an update on the status of the company.
The decision comes weeks after the WSJ reported Quibi was exploring a possible sale amid underwhelming viewership and downloads, as well as potentially raising money or going public.
Quibi had reportedly pitched a sale to Comcast’s NBCUniversal, but the company was wary of the fact that Quibi doesn’t own many of the shows on its platform, according to the WSJ. The Information reported Tuesday that Quibi had also tried to sell its programming to Facebook, which also reportedly passed.
In response to reports that the company was looking to sell last month, a Quibi spokesperson told Realscreen at the time: “Quibi has successfully launched a new business and pioneered a new form of storytelling and state-of-the-art platform. Meg and Jeffrey are committed to continuing to build the business in the way that gives the greatest experience for customers, greatest value for shareholders and greatest opportunity for employees. We do not comment on rumor or speculation.”
But now, via the open letter posted by Katzenberg and Whitman, the rumor has been confirmed, with the company heads commenting on what might have played a role in bringing down the business.
“With the dedication and commitment of our employees and the support we received from our investors and partners, we created a new form of mobile-first premium storytelling,” Katzenberg and Whitman state via the letter. “And yet, 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.”
The short form mobile-first streamer has fallen short of expectations since it launched April 6 with nearly US$1.8 billion in investor injections. Designed to offer “quick bites” of content for on-the-go audiences, Quibi was dealt a blow when the COVID-19 pandemic sent much of the world into lockdown.
Despite a 90-day free trial, the app saw just 1.7 million downloads in its first week.
And while unscripted and documentary fare such as Chrissy’s Court and the Punk’d reboot attracted some buzz, the service failed to pull in the subscribers and viewership needed to stay afloat among heavy-hitting streamers such as Netflix and Disney+ – and the free short-form content offered on platforms such as YouTube.
Now, with operations being wound down, Jeffrey Katzenberg and Meg Whitman say via their open letter to staff that the intent is to “return cash to our shareholders, and say goodbye to our colleagues with grace.
“We want you to know we did not give up on this idea without a fight.”
(With files from Barry Walsh)