Despite a $2 billion investment, the company decided it was better to close than attempt a recovery.
Quibi caused a stir when it launched. The service was designed around short-form content, broken down into ten-minute chapters, designed to be viewed on smartphones.
This smartphone hook was essential. Quibi was designed for people on the go, and the content adapts to screens whether in portrait or landscape mode.
The company has largely used its nearly $2 billion seed investment to fund original content from creators like Guillermo del Toro and Steven Spielberg, as well as shows fronted by recognizable stars like Chrissy Teigen and Will Arnett.
>Quibi even attracted big-name advertisers like Pepsi and Walmart, generating around $150 million in ad revenue at launch.
According to Deadline, Jeffrey Katzenberg, founder of Quibi, called investors on the afternoon of October 21 to let them know the service was being shut down.
The company employed approximately 200 people, each of whom will lose their jobs and receive severance pay.
the Wall Street Journal reports that a restructuring firm had been hired to decide what should happen to Quibi – one of the recommended suggestions was closure.
Subscriber numbers were well below what the service needed to sustain itself. Katzenberg and Chief Executive Meg Whitman decided to shut down Quibi and return the remaining capital to investors, rather than try to survive and risk further losses.
Apparently Katzenberg had talked to Apple, Facebook, and WarnerMedia about buying Quibi, but none took the bite. The fact that Quibi doesn't own much of its content was a big reason why no sales took place.
While it's hard to say conclusively why Quibi didn't last more than six months, there's no doubt that the coronavirus pandemic didn't help.
Quibi launched as a mobile-only product, having only recently secured TV distribution deals with Apple and Google. At a time when so many people were locked indoors, with easy access to other streaming services on their computers and TVs, Quibi failed to find ground.
At launch, media also questioned whether there would be consumer interest in paying for a short-form streaming service, when YouTube and TikTok offered similar (albeit less organized and products) for free.
Finally, perhaps another reason why Quibi couldn't survive is that the streaming market is increasingly crowded, with established players like Netflix and Amazon competing against newer options like Disney+ and Peacock. .
