It's the end of the road for Quibi, the short-form streaming service for mobile devices that announced Wednesday it would be shutting down just six months after its launch. The company, founded by Hollywood producer Jeffrey Katzenberg and former HP CEO Meg Whitman, offered "quick bites" of programming for subscribers, signing big names such as Chrissy Teigen and Idris Elba for its short-form programming.
"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."
Raising $1.75 billion ahead of its April launch, Quibi courted investors including major media companies such as Disney, Comcast's NBCUniversal, and AT&T's WarnerMedia. The streaming company seemed to be doomed from the start, however, as the $4.99/month subscription-only drew about 500,000 subscribers as of a few weeks ago, a source told CNBC, when initial projections had been for 7 million subscribers in the first year. A poorly-timed launch added to Quibi's tough start, as the app pitched as the solution for younger people on the go debuted just weeks after the coronavirus pandemic hit the U.S. when people were staying home. Without the option to watch Quibi programming on the TV, streaming services like Disney+ and Netflix were the benefit of a subscription spike.
"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," Katzenberg and Whitman said. "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. ...All that is left now is to offer a profound apology for disappointing you and, ultimately, for letting you down."
Tuesday, The Information reported that Quibi had attempted to sell its content catalog to Facebook and NBCUniversal to recoup some of the losses for the company's investors, but had difficulty selling itself due to its two-year ownership contracts, which would require any buyer to basically purchase Quibi's technology.