Quibi to be wound down

Quibi co-founders Jeffrey Katzenberg and Meg Whitman are winding down the shortform video app and are looking to sell its content and technology assets.

Jeffrey Katzenberg

It marks a disappointing end to the costly venture, which aimed to bring movie-quality content to consumers’ smartphones but has fallen well short of expectations since launching in the US, Canada, the UK and Germany in April.

The app, which costs US$4.99 per month or US$7.99 for the ad-free version and also offers a 90-day free trial, carries high-end content featuring Hollywood stars and is designed to be viewed on the go, with all episodes shorter than 10 minutes.

Despite attracting US$1.75bn in investment from players including The Walt Disney Company, 21st Century Fox, NBCUniversal, Sony Pictures, Time Warner, ViacomCBS, Entertainment One, Lionsgate, MGM and Liberty Global prior to launching, Quibi failed to gain traction in a competitive SVoD market, reportedly losing 90% of early users after their free trials expired.

In a co-signed open letter, Katzenberg and Whitman wrote: “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.

“Unfortunately, we will never know but we suspect it’s been a combination of the two. The circumstances of launching during a pandemic is something we could have never imagined but other businesses have faced these unprecedented challenges and have found their way through it. We were not able to do so.”

As a result, the pair have decided to wind down the business, return cash to its shareholders and let Quibi’s employees go.

“We want you to know we did not give up on this idea without a fight. Our goal when we launched Quibi was to create a new category of shortform entertainment for mobile devices,” Katzenberg and Whitman continued.

“Although the circumstances were not right for Quibi to succeed as a standalone company, our team achieved much of what we set out to accomplish, and we are tremendously proud of the award-winning and innovative work that we have produced, both in terms of original content and the underlying technology platform.

“Over the coming months we will be working hard to find buyers for these valuable assets who can leverage them to their full potential.”

Earlier this year, Katzenberg said he hoped Quibi’s fortunes would improve as lockdown restrictions eased, partly thanks to the amount of time people would be spending in queues.

Katzenberg, the co-founder of DreamWorks and former chair of Walt Disney Studios, unveiled Quibi alongside former Hewlett-Packard CEO Whitman at the beginning of this year, touting the app’s new technology and the top Hollywood creators it was working with.