It only launched in April 2020, but streaming service Quibi is already closing its doors after suffering in a crowded and changed marketplace.
Despite a $2 billion investment, the company decided it was best to close rather than attempt a recovery.
What Was Quibi?
Quibi made quite the splash when it launched. The service was designed around short-form content, split into chapters lasting around ten minutes, that was designed to be watched on smartphones.
That smartphone hook was essential. Quibi was made for people on-the-go, and the content would fit screens whether they were in held in portrait or landscape.
The company made ample use of its nearly $2 billion start-up investment to fund original content from creators like Guillermo del Toro and Steven Spielberg, along with shows fronted by recognizable stars like Chrissy Teigen and Will Arnett.
Quibi even pulled big name advertisers like Pepsi and Walmart, raising around $150 million in advertising revenue at launch.
Quibi Is Shutting Down
According to Deadline, Quibi founder Jeffrey Katzenberg called investors on the afternoon of October 21 to let them know that the service is being shut down.
The company employed around 200 people, each of whom will lose their jobs and be paid severance.
Wall Street Journal reports that a restructuring firm had been brought in to decide what should happen to Quibi---one of the recommended suggestions was shutting down.
Subscriber figures were far below what the service needed to sustain itself. Katzenberg and chief executive Meg Whitman have decided to close Quibi and return the remaining capital to investors, rather than trying to survive and risk further loss.
Apparently, Katzenberg had talked to the likes of 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 key reason that no sale took place.
Why Couldn't Quibi Survive?
While it's hard to conclusively say why Quibi failed to last longer 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. In a time when so many people were shut indoors, with easy access to other streaming services on their computers and TVs, Quibi failed to find traction.
There were also rumblings in the media at launch whether there would be any consumer interest in paying for a short-form streaming service, when the likes of YouTube and TikTok offered similar (albeit less curated and produced) for free.
Finally, perhaps another reason that Quibi couldn't survive was that the streaming market is becoming increasingly crowded, with established players like Netflix and Amazon competing against newer options like Disney+ and Peacock.