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Congrats, Meg Whitman, another multi-billion-dollar write-off for the CV: Her web vid upstart Quibi implodes
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Video-streaming upstart Quibi, which tried to differentiate itself from the likes of Netflix by offering episodes that only ran for 10 minutes max, will close its doors.
Quibi was founded by Jeffrey Katzenberg, who led Walt Disney Studios for a decade and then founded DreamWorks Animation. His CV includes hits such as The Lion King, Aladdin, Shrek, and Kung Fu Panda. Katzenberg hired former eBay and HP leader Meg Whitman as CEO.
The company’s tagline – “Quick Bites, Big Stories” – reflected its strategy to offer video content that could comfortably be consumed on a smartphone while commuting or waiting for Starbucks to brew you a gluten-free oat-milk single-origin lattecino.
The company raised a $1.75bn and blew it on a content library that included shows featuring Hollywood A-listers, such as Idris Elba, Reese Witherspoon, and Christoph Waltz, plus titles featuring at least one Hemsworth brother (the one from the Hunger Games, not the one from Thor) and a minor Kardashian. And then it opened for business in April 2020 to almost instant derision.
The startup managed to secure at least a couple of million app downloads, though that was far short of hoped-for first-year subscriber base of more than seven million. In reality, once its free period was over, it managed to obtain 72,000 paid-up subscribers. Rumors that the platform was in trouble soon emerged.
And today Whitman and Katzenberg published an open letter in which they announced: “We are winding down the business and looking to sell its content and technology assets.”
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“Quibi was a big idea and there was no one who wanted to make a success of it more than we did. Our failure was not for lack of trying; we’ve considered and exhausted every option available to us,” the pair 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. As a result we have reluctantly come to the difficult decision to wind down the business, return cash to our shareholders, and say goodbye to our colleagues with grace. We want you to know we did not give up on this idea without a fight.”
Their analysis of the reasons for failure suggest either “the idea itself wasn’t strong enough to justify a standalone streaming service or because of our timing.” Katzenberg blamed Quibi’s slow start on the COVID-19 coronavirus outbreak so “timing” sounds like code for “pandemic.”
Which may be a reasonable argument because Quibi was designed to offer content that would be consumed on-the-go, and in 2020 people have done a lot less going.
Or maybe the content just wasn’t very good: your correspondent could not name a single Quibi show before researching this story, and has only ever heard it discussed as just not a very good idea. Yet my teenage offspring seem to watch inordinate amounts of YouTube and TikTok. And if you can’t get the kids with short chunks of Hemsworth or Kardashian, who will you get?
Katzenberg and Whitman signed off with: “We will be forever proud of the extraordinary partnership we were able to forge between the best of Hollywood and Silicon Valley.”
Whitman now has the demise of Quibi to add to her CV alongside the not-super-successful split of HP; being chairwoman when the IT titan blew $11bn on giga-disaster Autonomy that had to be written down by $8.8bn; and a failed tilt at becoming governor of California. ®