Short form video streaming service Quibi is shutting down, according to reports from The Wall Street Journal and The Information. Employees and investors were notified about the impending shutdown over phone calls that went out this afternoon.
Quibi, which launched in April, is similar to Netflix or Hulu but it provides video content in shorter 5 to 10 minute snippets for $4.99+ per month. Quibi envisioned its short form video being watched on smartphones, with the company pouring more than $1 billion into original content.
Following its launch, Quibi saw a slow start, which Quibi founder Jeffrey Katzenberg attributed to the pandemic. Katzenberg called Quibi's launch "not close to what we wanted," and the service ended up with an estimated 400,000 to 500,000 subscribers.
Quibi believed that it would garner approximately 7.4 million subscribers during its first year after launching, and it has so far come nowhere close to meeting that target.
Katzenberg approached several tech executives to see if Quibi might be able to be sold off, but no companies were interested. Katzenberg spoke with Facebook, Warner Media, and even Apple's software and services chief Eddy Cue, all of whom declined a purchase.
Companies were not interested in Quibi because of its unappealing licensing deals. Quibi's content is exclusive to Quibi for just two years, with creators then able to license it to other services, and after seven years, creators get back show ownership. Quibi is also facing a lawsuit from interactive video company Eko, with Eko claiming Quibi stole its horizontal/vertical video content technology.
Quibi also attempted to expand outside of its smartphone-only streaming format, offering apps on other platforms such as the Apple TV. An Apple TV app for Quibi launched yesterday, but the platform expansion has come too late to save the service.
Quibi had backers that included most major Hollywood studios, Alibaba, and Google, and The Information says it will shut down with $850 million in cash and several hundred million in debt. It is not clear how much money will be returned to shareholders, and investors in the company stand to lose money.
