US-headquartered Quibi confirmed yesterday it is winding down its online streaming service despite raising $1.75bn from investors including corporates Alibaba, Sony, 21st Century Fox, Walt Disney, WarnerMedia and Entertainment One.
Quibi’s platform centred on episodic shows with episodes up to 10 minutes in length but made with similar per-minute budgets as shows on streaming services such as Amazon Prime Video or Netflix.
The service was launched in April this year but failed to get near its subscriber target, partly due to the coronavirus pandemic cutting down on short-term transport that would have formed part of its most suitable viewing period, though reviews of its programming were also mixed at best.
The number of subscriber householders reached by Quibi had fallen from about 1 million to a little over 700,000 in the third quarter of 2020, against a 7.4 million target, according to estimates by research firm Kantar cited by the Wall Street Journal.
Quibi will have about $350m left over to return to investors once its bills are paid, it told investors yesterday, according to The Information. Its earliest backers will get preferential treatment, The Information stated, adding that they include internet technology provider Google and social media group Facebook.
Co-founders Jeffrey Katzenberg and Meg Whitman said in a blog post: “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.”
The company – then known as New TV – had raised a total of $1bn as of mid-2018, $200m of which was sourced from media and entertainment providers Walt Disney, 21st Century Fox, Warner Bros and Entertainment One. Institutional investors including WndrCo, the media holding company formed by Katzenberg, provided the rest of the capital.
Quibi closed a $750m round in March this year, and although it did not reveal the participants in that round, it has identified electronics manufacturer Sony’s film arm, Sony Pictures Entertainment, as well as e-commerce firm Alibaba, Goldman Sachs, JPMorgan Chase and Madrone Venture Partners as investors.
