Quibi Is Officially Dead
By Todd Spangler
As previously announced, the Quibi app as of Tuesday (Dec. 1) is no longer operable — marking the quick and quiet end of Jeffrey Katzenberg’s ill-fated $1.75 billion quest to carve out a new corner of the subscription streaming-video market.
The Quibi app will remain on users’ devices until they delete it. However, the app no longer allows users to sign in (returning an error message if they try to) or access any Quibi content.
In October, Quibi announced that its board had decided to shut down the company, less than seven months after its April 6 debut. The startup, led by Katzenberg and CEO Meg Whitman, had promised subscribers a daily dose of “quick bite” originals, chopped into episodes of 10 minutes or less, featuring recognizable Hollywood talent.
Why did Quibi fail? Despite throwing millions at original series, spending up to $6 million per hour of produced content, Quibi simply wasn’t compelling enough for consumers to open their wallets — and the app launched amid a burst of new entrants into the streaming wars, including Disney Plus, HBO Max and Peacock.
Katzenberg and Whitman had believed that Quibi offered a totally separate value proposition from the big SVOD services like Netflix — Watch high-quality entertainment on the go! — but consumers voted with their wallets. And it turns out that people mostly want to watch premium programming on their living-room TVs. Quibi initially stuck with its mobile-centric vision before adding support for AirPlay and Google’s Chromecast in June, two months after its launch — and then finally rolling out native apps for Apple TV, Amazon Fire TV and Android TV just two days before the startup announced its shutdown plans.
While Katzenberg had posited mobile video as a “white space” ripe for the taking, in reality Quibi was also fighting for attention against a massive and growing ecosystem of mobile video apps like TikTok, Instagram, Snapchat and YouTube that provided — for free — a virtually endless stream of short-form entertainment.
As of the third quarter of 2020, Quibi reached 710,000 subscriber households, down from 1.1 million the prior quarter, according to estimates from research firm Kantar. Quibi had cost $4.99 (with ads) and $7.99 (without ads) per month.
Now that its streaming service has passed into the dustbin of history, Quibi is engaged in the final stages of winding down the business. (As part of that, Quibi has wiped clean its social accounts on Twitter, Facebook and Instagram.) The company reportedly told investors including Disney, NBCUniversal, WarnerMedia and ViacomCBS that it would return $350 million of its cash on hand to them, after raising about $1.75 billion. Quibi also has tapped LionTree to try to sell off its assets.
Meanwhile, Eko, the interactive-video company whose backers include Walmart and hedge fund Elliott Management, is still seeking to recoup nearly $100 million in damages from Quibi. Eko alleges Quibi’s Turnstyle video-toggling feature infringed its patents and that Katzenberg’s startup stole trade secrets. Quibi has called the claims baseless.
Industry observers believe Katzenberg, who had achieved major success as a movie mogul prior to launching Quibi, will keep his head down for the time being. The speculation is that Katzenberg will mostly focus on tending to the investments through his WndrCo holding company.
“I think he will go off the grid for a while to lick his wounds,” one media exec said. “This one must be very painful for him, because it was so high profile — and it failed so fast.”
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