Quibi, the short-form, mobile phone-first streaming video service that raised millions of dollars from investors who had never seen a second of its proposed content, will shut down, its executive management announced in a blog post on Wednesday.
The move means investors who poured billions of dollars into Quibi will recoup some of their cash, though nowhere near as much as what was pumped into the service early on.
“Quibi was a big idea and there was no one who wanted to make a success of it more than we did,” founder Jeffrey Katzenberg and chief executive Meg Whitman wrote in an open letter. “Our failure was not for lack of trying; we’ve considered and exhausted every option available to us.”
Those options included selling the company’s content to third parties, including Comcast’s NBC Universal and Facebook. When that didn’t work, Quibi explored the possibility of putting itself up for sale. That didn’t work, either.
“While the result was not what any of us wanted, we did accomplish a number of things and we are very proud of what the talented Quibi team has built with the blood, sweat, and tears that they poured into this business over these past two years,” Katzenberg and Whitman wrote.
Quibi was an audacious attempt to see if short-form, mobile-first video content could exist in a streaming media landscape dominated by YouTube, Netflix, Facebook and Amazon. Riding on his reputation as a movie studio veteran, Katzenberg convinced dozens of big-name investors to part with billions of dollars before they’d ever seen a second of Quibi’s content.
The service signed on big-name content partners, including the BBC, NBC News and the CBS News magazine show 60 Minutes. It signed on celebrities like Adam Devine and Will Smith who were more than willing to bring their star power to the service. And it roped in household names like Anheuser-Busch, PepsiCo and Procter & Gamble who agreed to buy advertisements along shows that had yet to launch (and sometimes had not even started production at all when the contracts were signed).
Katzenberg believed his reputation coupled with the millions of dollars raised form investors and advertisers as well as the celebrity contracts and promises of blockbuster hits would be enough to guarantee Quibi’s success. It sought to pull eyeballs away from amateur videos produced on YouTube and Facebook with the idea in mind that viewers would gravitate toward better-produced mobile content backed by stars and brand names.
But its target demographic was skeptical from the start. Instead of trying to make something new, it came across to millennial viewers that Quibi was focused on bringing Hollywood to the small screen. They already had apps for that — Netflix, Amazon Prime, Hulu — and they chose YouTube and Facebook instead.
To make matters worse, Quibi’s chief executive Whitman was embroiled in a scandal months before the service launched. In January, a tech publication revealed Whitman had crassly compared journalists to sexual predators who “groom” child victims. It was a candid moment drawn from her experience as the chief executive of several large tech companies — something that made a target of Wall Street reporters (and, later, political columnists when she ran unsuccessfully for governor of California). And it wasn’t intended to get out.
But it did. Whitman later said she was “super sorry” for the comments and added her profound “respect” for the “important role that you play.” By then, the damage was done. And tech reporters assigned to cover Quibi from that point on did not forget what she said.
Three months after Whitman’s comments were exposed, Quibi launched. The service did not live up to the pre-launch hype: The content was underwhelming at best, and despite offering users a three-month trial to stick around, most left the service by the time their trial was up. A partnership with T-Mobile to offer Quibi to the phone company’s customers for free wasn’t enough to draw more viewers, either.
Quibi also had some bad luck in terms of timing: A service targeting people who are constantly on-the-go rolled out to viewers who were stuck at home because of the global coronavirus health pandemic. Those viewers put down their phones and picked up their TV remotes. At launch, Quibi offered no way to stream content on the biggest screen in the house.
“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,” Katzenberg and Whitman wrote. “As entrepreneurs our instinct is to always pivot, to leave no stone unturned — especially when there is some cash runway left — but we feel that we’ve exhausted all our options.”
Katzenberg and Whitman ended their letter on Wednesday with an apology peppered with grace to the few subscribers who stuck around to see what Quibi might ultimately offer next.
What happens to the company’s library of content remains to be seen.