So long Quibi, it's been short and swell.
The mobile-first streaming service — which promised to deliver bite-sized, high-quality episodes in 10 minutes or less — is shutting down its operations just six months after it launched. Despite raising $1.75 billion and having over 100 series featuring top stars like Chance the Rapper, Chrissy Teigen and Liam Hemsworth, the service failed to gain traction. The company is planning on selling what it can of its shows to return as much cash funding to its investors.
"Quibi was founded to create the next generation of storytelling," Quibi founder Jeffrey Katzenberg said in a statement. "We have assembled a world-class creative and engineering team that has created an original platform fueled by groundbreaking technology and IP, enabling consumers to view premium content in a whole new way. The world has changed dramatically since Quibi launched and our standalone business model is no longer viable."
People who worked with or at Quibi told Cheddar the decision to call it quits came as quite a shock. Many were still in production or hiring for their Quibi projects. While there was an internal employee meeting set for Wednesday evening, it was business as usual at the company. There were rumors in the media that Quibi may be sold, but several felt the company still had years left given the amount of funding it raised to launch and its advertiser support.
Quibi was the brainchild of former Disney and DreamWorks executive Katzenberg. He brought on CEO Meg Whitman, who previously led Hewlett-Packard, to give the company the combination of media and technology star power in an effort to gain traction in the streaming age. Investors included The Walt Disney Company, 21st Century Fox, NBCUniversal, Time Warner, Viacom, Liberty Global, Goldman Sachs, JPMorgan Chase, and Alibaba Group, among others.
The pandemic may have played a role in Quibi's short tenure, but expensive content may have been its major death knell. Insiders previously told Cheddar that Quibi was paying between $8 million to $15 million for some of its marquee shows, and only secured a two-year licensing deal instead of buying the content outright. In January, The Information reported about two-thirds of its first year $1.5 billion operating budget would go towards acquiring shows and movies. While it did win some Television Critic Awards and creative Emmys, none of its shows really stood out as a breakout hit.
"I think this is another lesson that execution trumps talent and money and the critical importance of the quality of content," said David Jones, founder of brandtech firm You and Mr. Jones. "You can have big-name, super-connected management talent and deep pockets, but it's execution that builds a big business. And despite people spending much more time on mobile during the pandemic, they weren't on Quibi as the content just wasn't good enough."
Tal Chalozin, chief technology officer and co-founder of advertising technology company Innovid, added that the challenges of launching an unknown product without a past library of content added to Quibi's woes. Not only did it cost more money to have something for people to watch, but users also didn't have hours of known and trusted hits to fall back on. The initial mobile-only experience limited its distribution, though the company acquiesced to user demands and was eventually available on Apple TV, Android TV, and Amazon's Fire TV.
"And lastly, it's hard to win when you set such high expectations," Chalozin pointed out.
Quibi was downloaded 9.6 million times by Apple App Store and Google Play users, according to app analytics firm Sensor Tower. Since its launch in April, customers spent an estimated $7.7 million dollars on subscriptions, but the business was slowing down. There were only 770,000 first-time installs of the Quibi mobile app to-date in October, a decrease of 41 percent from an estimated 1.3 million during the same period in September.
The company had set an internal goal of 7.4 million subscribers by the end of the year, but a source told The Wall Street Journal it was only on track to secure less than 2 million paying customers by 2020.
Quibi was also looking for customers in the wrong places which sped up its abrupt end, said Matt Conlin, president and co-founder of performance marketing company Fluent. It pushed its brand-building ad campaigns on television, including a splashy commercial during this year's Super Bowl, but the target audience was on their phones.
"Savvy digital [marketers], especially those in the mobile app community, know that the key to successful user growth starts with a mobile-first strategy focusing on the outcomes, hyper-focused on tangible metrics which boost their downloads and engagement — a secret Quibi execs seem to have missed as their app was notably missing from any 'top downloads' lists across all app stores since launch," Conlin said.
