Quibi, the short-form video streaming service from Jeffrey Katzenberg and Meg Whitman, announced Wednesday that it will be shutting down. The abrupt end to the expensive project comes just six months after its debut.
Quibi was reported to be returning $350 million of the $1.75 billion it raised from investors. (NBCUniversal, the parent company of NBC News, is a minority investor in Quibi, and NBC News produced a daily show on the platform. NBCUniversal and NBC News declined to comment.)
The company struggled to win over subscribers and meet its growth targets. Since it launched in April, Quibi has faced tepid reviews and internal strife, and it has failed to win over consumers in the numbers it needed to thrive.
Katzenberg was already exploring options last month, including selling the company, as he struggled to sign up subscribers.
The service, which was highly anticipated given the involvement of Katzenberg, the former chairman of Walt Disney Studios and a co-founder of DreamWorks Animation, included a solid roster of shows with producers and stars such as LeBron James, Jennifer Lopez, Steven Spielberg, Kevin Hart and Chrissy Teigen.
The format featured five- to 10-minute episodes of shows, and the service could initially be accessed only on mobile devices. When it launched, Quibi offered free subscriptions for the first 90 days. Eventually, it was updated to allow subscribers to use AirPlay and Chromecast to watch content on their televisions, and on Tuesday the company launched apps for Apple TV, Android TV and Fire TV.
However, the company faced issues from the beginning. Many industry insiders failed to see the novelty of the service and doubted whether it would succeed.
Downloads continued to be lackluster in May, even with the free trial. In the first month after launch, Quibi had 2.6 million installations, according to SensorTower's data on mobile apps. Quibi itself put the number at 3.5 million downloads but 1.3 million active users. The numbers didn't reflect paying customers who continued to use the service once the free trial had ended.
In June, Quibi was reported to have said it expected to have spent $1 billion of the $1.75 billion it had raised by the third quarter of 2020. It also projected that it would need to raise an additional $200 million by mid-2021 to stay viable. Quibi also faced internal issues, as differences between Katzenberg and Whitman, a former executive at The Walt Disney Company and DreamWorks and former CEO of eBay, were reported to have jeopardized the already struggling company.
The same month, Katzenberg attributed "everything that has gone wrong to coronavirus."
Central to Quibi's stated purpose was the belief that users on the go would tune in to watch short clips of entertainment, news and sports content on their mobile devices. The brevity of episodes was geared toward people watching for brief periods while they went about their daily lives. It was meant to be similar to the format of chapters in a book, in which people could briefly tune in and get complete snippets of content.
The coronavirus did greatly curtail activities as more people worked from home and avoided going outdoors. The launch of Quibi came as restrictive stay-at-home orders swept much of the country.
But Quibi faced an uphill battle even before it launched given the highly competitive streaming landscape. For one thing, it didn't own much of the content it relied on. It paid for shows and had licenses set to last for several years before the content would be returned to the companies that created them.
In addition, the technology it heralded as a key point of differentiation from competitors, the ability to switch in real time between horizontal and vertical viewing, was quickly challenged in court over allegations of patent infringement.