After raising around $1.8 billion in funding for original content, short-video streaming platform Quibi is officially shutting down.
American film producer, ex-chairman of Walt Disney Studios, co-founder of DreamWorks Animation and founder of Quibi Jeffrey Katzenberg began raising money for the short-form video idea in 2017, raising around $1.8 billion in funding to spend on launching the streaming service, advertising and primarily producing content. The concept was a typical video streaming platform, with episodes 10 minutes of less, designed for mobile-only viewing in portrait or landscape. The app was launched in April with disappointing downloads despite a generous three-month free trial. Just one month after launch, while other streaming platforms were thriving during the lockdown, Katzenberg blamed the pandemic on the lack of user sign ups. A month after that, Quibi cut the pay of senior executives, with a report the same month stating Quibi was on track for just 27% of its subscriber goal by the end of the year. By July many users’ three-month trials were up, Sensor Tower estimated only 8% of free trial users converted to paying subscribers. A number of executives stepped down and suits were filed against the company, claiming Quibi had stolen features.
Today, just six months after launching, Katzenberg, and American business executive, ex-president of Hewlett Packard Enterprise and CEO of Quibi Meg Whiteman in an open letter detail issues with the platform, plans to wind down the business, and sell off content and technology to recoup money for investors.
“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.”
“As a result we have reluctantly come to the difficult decision to wind down the business, return cash to our shareholders, and say goodbye to our colleagues with grace. We want you to know we did not give up on this idea without a fight.”Jeffrey Katzenberg and Meg Whitman, Quibi
One of the issues against the platform that we’ve previously mentioned, it seems the executives are focused on on-boarding Hollywood actors, producers, directors and celebrities to create original short shows. Take the YouTube Original approach, give a budget to large online creators, those that have been thriving in creating short-form video on YouTube, TikTok and Instagram, growing audiences and the entire industry over the last 10+ years. It seems Quibi may have not only sought out Hollywood celebrities, they may have actively turned down online creators: