Jeffrey Katzenberg and his right-hand woman, former Hewlett Packard executive and Republican Senate candidate Meg Whitman, had hoped to revolutionize at-home entertainment in the streaming age with ‘quick bites’ of video featuring some of the biggest names in the business backing their streaming platform Quibi. Unfortunately, the concept was deemed to be a joke from the minute it was announced. Even with $1.8 billion in start-up cash and creators like Steven Spielberg and Sam Raimi on board, audiences simply did not care enough to pay $5 a month (and that is with ads) to access it.
Quibi spent years building buzz, but will not survive its seventh month; it was launched boldly at the start of a pandemic that will end up easily outlasting it. The youth-oriented, short-form streaming entertainment platform headed by Jeffrey Katzenberg and Meg Whitman, has announced that it is calling it quits just six months after the service launched to great fanfare in April. The decision to pull the plug represents a major blow for Katzenberg and Whitman, who courted tech investors and raised an estimated $2 billion for the venture.
In an open letter posted late Wednesday, the company said that it is shutting down and planning to sell off its original content and other assets.
We started with the idea to create the next generation of storytelling and because of you, we were able to create and deliver the best version of what we imagined Quibi to be. So it is with an incredibly heavy heart that today we are announcing that we are winding down the business and looking to sell its content and technology assets.
Quibi was a big idea and there was no one who wanted to make a success of it more than we did. Our failure was not for lack of trying; we’ve considered and exhausted every option available to us.
While the result was not what any of us wanted, we did accomplish a number of things and we are very proud of what the talented Quibi team has built with the blood, sweat, and tears that they poured into this business over these past two years.
Quibi 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.
Unfortunately, we will never know but we suspect it’s been a combination of the two. The circumstances of launching during a pandemic is something we could have never imagined but other businesses have faced these unprecedented challenges and have found their way through it. We were not able to do so.
Jeffrey Katzenberg, the former head of Walt Disney Studios, blames the Chinese virus pandemic for Quibi’s disappointing launch. Meanwhile, competitor Netflix benefited from the pandemic, seeing 15.8 million new subscribers during the first quarter, more than double the 7.2 million expected. Notwithstanding the Netflix subscriber cancellations that began the day after the release of “Cuties,” when the hashtag “#CancelNetflix” was in the top-trending spot on Twitter. Netflix’s cancellation rate in the U.S. jumped to nearly eight times higher than the average daily levels recorded in August 2020 — reaching a multiyear high.
The letter continues…
Which brings us to this moment. 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.
Our goal when we launched Quibi was to create a new category of short-form entertainment for mobile devices. 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 of the award-winning and innovative work that we have produced, both in terms of original content and the underlying technology platform. Over the coming months we will be working hard to find buyers for these valuable assets who can leverage them to their full potential.
Hopefully Reno 911! ends up somewhere soon, and will we ever get to see the Russo Brothers’ ‘Slugfest‘ (their Marvel versus DC Comics docuseries)?
We want you to know that we got up every day and genuinely loved coming to work with the most remarkable and passionate team that we have ever assembled. We will be forever proud of the extraordinary partnership we were able to forge between the best of Hollywood and Silicon Valley.
All that is left now is to offer a profound apology for disappointing you and, ultimately, for letting you down. We cannot thank you enough for being there with us, and for us, every step of the way.
Jeffrey Katzenberg and Meg Whitman
Among the causes cited were a crowded marketplace and coronavirus lockdowns that made mobile less necessary, along with reviews that declared some of its content and its marketing scattered. One study found that Quibi converted just 8% of its initial free trials into paid subscriptions, generating only 72,000 paying customers among those who signed up for a 90-day free trial during the first few days of launch.
It should probably also be noted that both Jeffrey Katzenberg and Meg Whitman are prominent anti-Trump figures in the media. Katzenberg recently headlined a Joe Biden fundraiser that collected at least $6 million for the Democrat candidate, and proud never-Trumper Whitman has called Trump a “demagogue” when she backed Hillary Clinton in the 2016 elections. No wonder Chrissy Teigen was given her own show…!
Comic geek, movie nerd, father, and husband - but not necessarily in that order. Current captain of this ship o' fools who is rapidly training everyone's computers and snarkphone spell-checkers to misspell 'supposebly.'