Have you, by chance, heard of Quibi? Because if the TV shows Big Rad Wolf, Agua Donkeys or Shape of Pasta have failed to register on your to-watch radar, then – like most – you probably have not heard of Quibi.
A startup concocted by DreamWorks Animation co-founder Jeffrey Katzenberg and led by former Hewlett-Packard chief Meg Whitman, Quibi was slanted to be the latest challenger to Netflix’s throne, a short-form streaming service that offered ‘snackable’ original films and TV shows of ten minutes or less, in an attempt to revolutionise how consumers would watch content on the go.
The foundations seemed sound enough. The video platform – whose moniker is a portmanteau of the words ‘quick’ and ‘bite’ – lined up an all-star cast of Hollywood A-listers and producers, including Chrissy Teigen, Jennifer Lopez, LeBron James and Steven Spielberg. Prior to its rollout on 6 April it had raised $1.75bn in funding, with $1bn of that war chest being financed by big entertainment players, such as Walt Disney and Warner Media. “What Google is to search, Quibi will be to short-form video,” Katzenberg boldly announced to a crowd at South by Southwest in 2019.
But, since its launch (which occurred amidst the coronavirus outbreak), the billion-dollar venture was on the receiving end of regular body blows, and, on Wednesday of last week, the firm decided to call it curtains, having failed to live up to the hype and expectations. “It is with an incredibly heavy heart that today we are announcing that we are winding down the business and looking to sell its content and technology assets,” the two company heads stated in an open letter, on Wednesday evening.
So, what caused Quibi’s crash landing, little over six months after debuting?
Well, for starters, when it came to reeling in a significant viewer base, Quibi never really had a rod; in fact, it would be an understatement to say that it didn’t even possess the nous to fish. Although it counted 300,000 downloads on day one, it was a meagre effort when compared to the approximately four million first-day installs of Disney Plus, months prior, and although Quibi rose to third place in Apple’s App Store, it eventually dropped out of the top 70 – below rivals such as Hulu – ten days later. Moreover, according to the Wall Street Journal, only around 1.5 million active members – most of whom only signed up via the 90-day free trial – were still using it by the end of the following month; compare this to Netflix’s 192 million subscribers and the over 60 million who have joined Disney Plus, and Quibi’s numbers were little league from the get-go. The firm behind the app had an original year-one goal of 7.4 million paying customers, but revised projections anticipated around only two million members by April 2021.
According to the Journal, the pinch was truly felt when that 30% drop in expected customers led to financial strains within the company; looking set to have spent $1bn by the third quarter of this year and, despite having raised an extra $750 million in a second round of funding a month prior to launch, it was reported that Quibi would still require a further $200 million by the middle of 2021 in order to survive. Additionally, advertisers, such as Taco Bell and Walmart Inc, requested to alter the terms of their partnership – to amend the billing schedules or to delay payments – with the streaming platform, due to either Quibi’s lower-than-expected viewership or the coronavirus’ financial hits on their own respective operations.
Alleged internal conflict within the Quibi walls may well have played a hand in the downfall, too. There have been the well documented departures of high-level execs, including the 2019 exits of Janice Min, the head of daily content, and Tim Connolly, the head of partnerships and advertising, whose position was eventually ‘eliminated’. They were followed out the door by Megan Imbres, head of brand marketing, in April. There were also reports of a tense working rapport between the two heads, with Whitman, who is said to have found Katzenberg to be undermining and ‘dictatorial’, threatening to quit near the beginning of her tenure as chief exec in 2018. And there was the rumoured chagrin amongst staffers, who were ‘seething’ over Reese Witherspoon’s $6 million fee for narration work on the nature doc Fierce Queens, despite potential staff redundancies. (By that point, the company had apparently considered letting go 10% of its 250 employees, due to Quibi’s poor performance. It is also worth nothing that Witherspoon’s husband, Jim Toth, is the head of content acquisitions and talent.)
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