Why is Quibi shutting down already? Here's what we know

Joanna Estrada
October 22, 2020

The short-form video startup Quibi is now a short-lived platform.

When it launched back in early April, 2020, Quibi was just one of a slew of new services trying to challenge Netflix's dominance in this space.

Quibi offers entertainment and news in episodes of 10 minutes or less on mobile phones, initially promoted for on-the-go viewing.

But today Quibi's founder Jeffrey Katzenberg said he had seen the writing on the wall, unable to tell if COVID-19 killed his idea, or he did.

The company reportedly tried to sell off the platform to investors, but unfortunately had no success, forcing them to give up on their dreams of mobile-centric streaming content. Katzenberg called Quibi's launch "not close to what we wanted", and the service ended up with an estimated 400,000 to 500,000 subscribers.

Quibi's founder, former DreamWorks SKG head Jeffrey Katzenberg, along with Quibi CEO and former eBay chief Meg Whitman, wrote in a statement directed toward investors, partners and employees that while the service was a great idea that introduced the "next generation of storytelling" to the world, they, "with an incredibly heavy heart", have made a decision to wind down the business.

And of course installations don't equal paying users, so when you consider Disney+ reached more than 60 million subscribers since launching in November 2019, Quibi didn't get big numbers.

The letter goes on to identify the timing of its launch or "because the idea itself wasn't strong enough to justify a standalone streaming service" as the reason for failure, but it is likely a combination of the two.

Industry legends and stars from Steven Spielberg and Guillermo del Toro to Jennifer Lopez and Reese Witherspoon were among the stars who lined up to make movies and shows for the youth-focused, smartphone-only service. The report points to more signs of Quibi's imminent demise including canceled strategy meetings, employees meeting for goodbye drinks and Katzenberg reportedly flat-out telling people that he may have to shut the whole thing down.

The company said money from the sale of its assets will help pay off liabilities, with the remainder to be returned to investors.

Other reports by Click Lancashire

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