The Quibi streaming service, which offered users the chance to watch movies and TV shows broken up into short segments, has announced it is closing. The platform will cease operations on December 1, 2020.
The Quibi service was founded by Jeffrey Katzenberg, who ran Walt Disney Studios for a decade before founding DreamWorks Animation. The service was designed for users who didn’t have time to watch 30- or 40-minute episodes. Instead, Quibi offered shows in short episodes of up to 10 minutes, formatted to fit the smartphone screen.
The company raised $1.75 billion. The funds were spent on a content library that included series starring Hollywood celebrities such as Idris Elba, Reese Witherspoon and Christoph Waltz, as well as feature-length movies. In addition, the service’s library included documentaries, news and sports broadcasts. At the time of launch, 24 original series were available on Quibi. The authors of the platform promised to add new shows once a week, and by the end of 2020 to download more than 7, 000 movies, shows and series. The app ran on a subscription basis – $4.99 a month with ads and $7.99 without ads. The project launched in April.
The startup managed to secure two million downloads of the app, though this was less than the expected subscriber base in the first year, which was planned to be seven million. At the end of the free period, only 72, 000 subscribers, or 8 percent, agreed to continue using the service on a paid basis. The creators of the service planned to sell Quibi, but did not find any buyers.
This week, Katzenberg and Quibi CEO Meg Whitman Published an open letter in which they announced that they were "winding down the business and were going to sell the service’s content and technology assets." The company’s employees will be laid off.
"Quibi was a big idea, and no one wanted more success from it than we did. We failed not for lack of trying; we considered and exhausted every option available to us, " Whitman and Katzenberg said in the letter. – Our instinct as entrepreneurs is always to change direction, but we feel we have exhausted all options. As a result, we took the hard decision to wind down the business, return the money to our shareholders and say goodbye to our colleagues with dignity."
According to the creators of the service, there are several reasons for the failure of Quibi. In particular, Katzenberg notes that perhaps "the idea itself wasn’t strong enough." In addition, according to executives, the platform was launched at the wrong time. Quibi was offering content that could be watched on the go, and in 2020, during the outbreak of the Covid-19 pandemic and the self-isolation that followed, such a format became irrelevant.
Nevertheless, as Wall Street Journal writes , even before the Covid-19 crisis, the Quibi format raised questions. Consumers already had free short-form video services like YouTube. Quibi made a bet on being able to charge for subscriptions, offering viewers high-quality content, and paid well for software development, but it didn’t work. Some Quibi executives thought the venture could have been a success if the service had been better implemented, pointing to TikTok’s growth even during the pandemic. Some Quibi employees also noted that the platform could have been saved by moving to a so-called freemium model, in which some content would have been free and better programs would have been available by subscription.