Jeffrey Katzenberg is pulling the plug on Quibi — the mobile video experiment that, despite drawing the attention of investors (to the tune of $1.8 billion) and A-list talent, collapsed in the face of underwhelming downloads and viewership.
In an open letter, founder Katzenberg and CEO Meg Whitman confirmed yesterday (Oct. 21) after days of speculation that the company would be winding down after just six months, and its content and technology assets sold.
“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,” the letter reads. “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.”
It’s a move that perhaps was predicted by those who greeted Quibi’s business model with skepticism from the onset, but coming a mere six months after launch, it still has many in the industry reflecting on both the paid subscription prospects for short-form, mobile video and the glut of streaming services entering the market.
Girts Licis (pictured), head of strategy at international media consultancy K7 Media, tells Realscreen that while both the idea and timing played a role in the streamer’s demise, the latter may have had a greater impact.
“By timing I do not mean the impact of the pandemic as Katzenberg implies; instead I feel the timing of such a product may have been wrong in general,” he says. “I would be hesitant to say whether it’s been too early or too late, although I would say it is going to become increasingly difficult to launch a Quibi-like product in the era of Tik Tok.”
Over the coming months, Katzenberg and Whitman said they’ll work hard to find buyers who can leverage Quibi’s assets — which include a roster of short-form unscripted and documentary titles such as Dishmantled and Thanks A Million — to their full potential. From Licis’ vantage point, however, there’s no “win-win outcome.”
“For now, it is about minimizing losses and keeping everyone involved’s pride intact, out of respect,” he offers. “I am hopeful that Quibi’s fate will act as a bigger lesson, particularly for those brands and other investors involved. If anything, it is a warning not to let an individual’s past success blur your judgment.” (Katzenberg is known for his tenure as chairman of Walt Disney Studios and as the co-founder of DreamWorks).
The decision to shut down comes weeks after the WSJ reported the company was exploring a possible sale, 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.
Licis says the decision to explore a possible sale weeks ago was “a sign of desperation.”
“Like waving the white flag, in my opinion.
“It is important to remember that Quibi’s business has been being publicly dissected for months, revealing a multitude of problems. This is not just about mismanagement or the ‘wrong’ timing, there is serious suspicion that the very DNA of Quibi is deeply flawed — kept functioning thus far by generous injections of investor money.
“The real question is, with all the publicly available information about Quibi’s many issues, if there would be any real potential buyers at all… Whatever their reasons for purchasing let us hope it is someone who understands what Quibi’s millennial-skewed audience really wants.”
The ramifications of Quibi’s shutdown in the mobile, short-form video market are yet to be seen. Just this week, Snap — which has been bolstering its lineup of mobile short-form non-scripted content in recent months — reported its daily active users climbed 18%, while users watching its shows increased by more than 50% in Q3.
“There will not be another Quibi. This is not to say there will not be other mobile focused products or mobile tiers of broader products. I’m sure there will be, and that some of them will turn out to be much more successful,” Licis says.
“Quick bites” on Quibi
- Quibi received investment from the likes of The Walt Disney Company, NBCUniversal, WarnerMedia, Viacom, MGM, Entertainment One, All3Media co-owner Liberty Global, China’s Alibaba Group and UK commercial network ITV. Katzenberg’s WndrCo secured US$1 billion for the startup in 2018
- The platform launched April 6 with a 90-day free trial, amassing just 1.7 million downloads in its first week
- Quibi was initially dubbed “NewTV”