Quibi closes the bulkheads after only 6 months!
The mobile streaming service Quibi stops its service after only half a day.
1.4 billion dollars for 6 months
Quibi’s concept was to make professionally produced videos accessible to smartphone users. The videos should have a length of five to ten minutes. It was possible to view the respective clips vertically and also horizontally. The founders of Quibi, Jeffrey Katzenberg and Meg Whitman, announced two days ago that the service would be discontinued. With the streaming service, the founders actually wanted to bring together the new technologies from Silicon Valley and Hollywood. The two founders want to pay back the remaining investments to the investors after the closure.
This makes Quibi one of the most spectacular failures in 2020 and a very expensive attempt to compete with the other streaming providers. The fun has cost around 1.4 billion US dollars. The lack of experience of the founders cannot have been the reason, Jeffrey Katzenberg is former head of the Disney studios and Meg Whitman has also been successful so far. She was partly responsible for the success of the Ebay trading platform. According to Katzenberg, the corona crisis in May already showed that the start was very weak. He also points out that the crisis is responsible for this, because people are no longer using their smartphones as much as usual. At the beginning of the service, 1.75 billion dollars were collected from investors, with only 350 million remaining, which the Wall Street Journal reports will now be returned to investors. Among the investors were some well-known and big Hollywood companies, like NBC Universal and also Disney.
Speculations about failure
The two founders of Quibi do not agree on what the service ultimately failed. It is possible that the idea behind Quibi was simply not mature enough and the timing of the launch was not chosen correctly. Whitman and Katzenberg in a blog: “We suspect it was a combination of both”. But in the last six months some weak points have already emerged. For example, there was not the function to transfer the clips to the TV. This function was added by Quibi only afterwards. In addition to that, the sharing of links to the clips was also not possible. And not to mention the big competition. Quibi competed with his service against the biggest. Among them well known Amazon and Netflix. Quibi could not keep up with his offer. The subscription price was 4.99 US dollars per month with advertising.