Short-form video app service Quibi that was launched just six months ago in April, announced in a Medium post that it is shutting down. Started as a challenge to the industry leader Netflix and other streaming giants, the newbie mobile streaming app proved to be no match.
The video streaming app was started by ex Dreamworks Animation CEO Jeffrey Katzenberg and former eBay CEO and HP honcho Meg Whitman. "Although the circumstances were not right for Quibi to succeed as a standalone company, our team achieved much of what we set out to accomplish, and we are tremendously proud," the executives said in an open letter to employees, partners and investors.
The company said Wednesday that it would wind down its operations and plans to sell its assets.
The video platform was designed for people on the move who could check quick, short, and sweet content on their phones, but the space is already too crowded and has tough competition from similar apps backed by bigger tech and entertainment companies like Disney and Apple.
As the open letter very succinctly puts it, “cube is not succeeding. Likely for one of two reasons: because the idea itself wasn’t strong enough to justify a standalone streaming service or because of our timing.”
The company was started with an investment of $1.75 billion and spared no expense in its production value and talent. It had Chrissy Teigen, Kevin Hart and Steven Spielberg on board. And it indulged in some heavy marketing to announce their presence.
The idea behind Quibi (a short form of quick bites) was to create a new category of short-form entertainment for mobile devices. The platform managed to produce some award-winning and innovative work both in terms of original content and the underlying technology platform. There was a short version of “60 Minutes” and reality shows. The shows never achieved big popularity or recognition, although it managed some Emmy awards earlier this year.
But Quibi never attained popularity among the audiences, despite a 90-day free trial. As the letter said, the timing was wrong. People were not travelling much due to the pandemic and were stuck at home where the long-form entertainment on TV was more attractive than watching something over the mobile.
Also the mobile platform abounds with short form videos, the choice is just too vast. Good production values and an A-list talent notwithstanding.
Quibi has never put out its subscriber figures, but mobile research firm Sensor Tower estimates 9.6 million installations of Quibi’s mobile app since its launch. Streaming services like Netflix and Disney have witnessed an increase in number during the pandemic with Disney reporting 60 million users and Netflix reporting 195 million users worldwide.
“While we have enough capital to continue operating for a significant period of time, we made the difficult decision to wind down the business, return cash to our shareholders, and say goodbye to our talented colleagues with grace,” Whitman, the CEO, said in a statement.
People in the know and from the content-making industry say that Quibi might not have succeeded even without the pandemic. According to them, the content makers just did not have the pulse of the audience. Short video demographic is young and savvy and the app bizarrely did not allow screenshots of any of the shows. They said in one swoop the company lost the sharing leverage that the young audience thrives on. No tweeting, no gifs, and no comments were an absolute loss to the company.
The industry know-how called it over-produced with overly done content that had no place in a market that already was crowded and very savvy.