The corporate, which struggled after launching in the course of the pandemic, has exhausted all choices, the letter says. Following an evaluation of different strategic choices, Quibi’s board determined to shutter the corporate and return the remaining money to traders, and it plans to hunt a number of consumers for it property.
The mobile-only streaming service was launched in April by Katzenberg, a Hollywood veteran, and Whitman, a Silicon Valley powerhouse. It supplied cellular movies and sequence minimize into bite-size segments shorter than 10 minutes.
Not like short-form movies from YouTube, Instagram or TikTok, Quibi’s pitch to shoppers was that it supplied content material created with massive manufacturing budgets, just like main sequence. It raised practically $2 billion in funding from traders together with Disney and Alibaba, and courted high expertise like Steven Spielberg and Jennifer Lopez.
“It is the largest concept that we have ever accomplished,” Katzenberg instructed CNN Enterprise a yr in the past. “I simply know it is going to work.”
However Quibi was primarily based on the imaginative and prescient that buyers would pay to observe quick spurts of content material whereas on the go — an concept that apparently did not take maintain in 2020, when most individuals have been caught at dwelling due to the pandemic.
“The elemental drawback the service was meant to resolve (needing a brand new service for on-the-go, short-form, paid premium video) was confirmed pretty insignificant in 2020,” Andrew Hare, senior vp of analysis for consulting agency Magid, instructed CNN Enterprise.
Nonetheless, Katzenberg instructed CNN Enterprise earlier than launch that the corporate may gain advantage from the pandemic, noting “quick-bite, super-premium Hollywood-quality content material goes to resonate now greater than ever.”
That wasn’t the case, nevertheless.
Regardless of an increase in demand for different streaming providers, Quibi by no means discovered an viewers and struggled from launch. Subscriptions to the app value $4.99 per thirty days with advertisements, and $7.99 with out, and shoppers simply did not need to spend time or cash on the app.
“Quibi just isn’t succeeding,” Katzenberg and Whitman stated within the letter. “Possible for certainly one of two causes: as a result of the concept itself wasn’t sturdy sufficient to justify a standalone streaming service or due to our timing. Sadly, we are going to by no means know however we suspect it has been a mixture of the 2.”
The pandemic was not solely guilty for Quibi’s failure, in line with Magid’s Hare.
“Streaming video seems to be a class persons are very snug spending time utilizing in the course of the pandemic,” Hare stated. “Simply not Quibi.”
Hare added that the corporate additionally suffered from a “lack of social media virality,” an unfamiliar model and its mobile-only proposition, which meant it wasn’t obtainable on related TVs for individuals who might have been watching at dwelling in the course of the pandemic.
“Merely put, the worth proposition and use case weren’t sturdy sufficient for shopper adoption,” he stated. “Was it the aggressive forces, the pricing, the distribution, the messaging, the pandemic? Sure, it was all of it.”
“Whereas we’ve sufficient capital to proceed working for a big time frame, we made the tough choice to wind down the enterprise, return money to our shareholders, and say goodbye to our proficient colleagues with grace,” Whitman, who has served as Quibi’s CEO, stated in an announcement Wednesday.
The corporate stated Quibi subscribers will obtain notifications relating to the ultimate date of entry to the platform.