The billion-dollar app goes bust a mere 6 months after launch
Backed by some of Hollywood’s biggest names, streaming service Quibi has announced its closure – only six months after launch.
Back in 2018, Quibi attracted $1.75bn (£1.34bn) in funding from some big names in film, business, and tech. In a nutshell, it promised to be the next big thing in high-quality streaming.
Quibi, a shortened word for “Quick Bites”, asked consumers for $4.99 a month (or $7.99 to get rid of ads) in return for a stream of content, all of which would be less than 10 minutes long. The company wanted to tap into a market of commuters, and maximise on the seemingly-short attention span of modern audiences.
This, it seemed, was their downfall.
With TikTok, YouTube, and various other social media platforms all providing short bites of user-generated content for free, charging a premium seemed to prevent Quibi from maintaining customers.
Shortly after their launch in April, Quibi had over 7 million subscribers, however, most of these were taking advantage of a 90-day free trial. Numbers had plummeted to 500,000 at the start of October. In comparison, rival Netflix has almost 200 million subscribers.
Quibi’s founders, billionaires Jeffrey Katzenberg and Meg Whitman, blame the pandemic for its failure, which they explained in an open letter to investors and the public.
The letter said: “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.”
As well as poor timing, the company had been involved in a lawsuit from Eiko, who claimed that Quibi had copied their technology.
Financial issues were made worse with fees well into the millions used to attract Hollywood stars to the platform.
Reese Witherspoon was said to have been paid $6m for a series of six-minute nature voiceovers, and the most expensive Quibi series has a budget of $100,000 a minute.
It is clear that Quibi had more problems than simply bad timing, but as the platform sells off its assets, the ongoing pandemic has ensured that its founders will have time to work out exactly what went wrong.
Words by Emily Withers