The pandemic forced would-be subscribers away from the kinds of on-the-go situations Quibi envisionedGETTY IMAGES
Quibi is "shutting down a mere six months after launching its streaming service," which has been "plagued with problems since its April debut," according to Mullin, Flint & Farrell of the WALL STREET JOURNAL. Sources said that Quibi Founder Jeffrey Katzenberg and CEO Meg Whitman "decided to shut down the company in an effort to return as much capital to investors as possible instead of trying to prolong the life of the company and risk losing more money." The streaming service was "designed for people who consume entertainment in short increments on their smartphones," but the pandemic "forced would-be subscribers away from the kinds of on-the-go situations Quibi executives envisioned for its users." Sources said that some Quibi execs "believed the venture could have been a success, if not for the pandemic, with better execution, pointing to the rise of TikTok" (WALL STREET JOURNAL, 10/22).
STREAMING WARS' FIRST BIG CASULTY: In L.A., Faughnder, Lee, Perman & Sakoui cite sources as saying that Quibi, which employed 265 people as of April, "plans to use its remaining cash of about $350 million to pay back investors." It is a "stunning turn of events for a company that promised to transform the entertainment industry." Quibi in a statement yesterday said that it will "close down the business and begin the process of selling off assets over the coming months." Quibi's downfall is the "most spectacular failure yet in the media industry's streaming wars era, which has seen the launch of well-backed services" including Disney+, HBO Max and Peacock (L.A. TIMES, 10/22). CNBC’s Andrew Ross Sorkin said a “lot of the big media companies” that got involved in Quibi, "are not the ones that are the big losers here" because of how their investments were structured. Sorkin: "The major losers are actually some of the big banks that put money into this.” He added, “I'm not necessarily a believer the pandemic was ultimately the problem unto itself” (“Squawk Box,” CNBC, 10/22).
UPHILL BATTLE FROM THE START: In DC, Steven Zeitchik notes Quibi went ahead with its launch in April "despite an emerging recession that would squeeze both its advertisers and customers and despite encountering the more obvious hurdle that a company designed to serve entertainment on the go wasn't built for a time when people were staying home." The service "struggled to find its niche and had few breakout hits. According to data firm Sensor Tower, the Quibi app has been installed "just 9.6 million times since launch," and "many users were not paying" (WASHINGTON POST, 10/22). In N.Y., Nicole Sperling notes Quibi produced more than 100 original series, along with offerings like news from NBC and CBS, and sports programming from ESPN. But it "struggled to attract subscribers from the start and those who did tune in groused that Quibi wasn't giving them what they wanted" (N.Y. TIMES, 10/22). IndieWire TV Editor Kristen Lopez: “It's not enough to have stars, it's not enough to have original content. You need to be very aware of what the market will hold, what your audience is, what they’re willing to pay” (“GMA,” ABC, 10/22).
