Business

Short-video app Quibi shutting down just months after launch

Short-video app Quibi said it is shutting down just six months after its early April launch, having struggled to find customers.

Mobile-only 'quick bites' streaming platform had big name investors

Quibi founder Jeffrey Katzenberg presents the company's technology at the Sundance Film Festival on Jan. 24 in Park City, Utah. (Daniel Boczarski/Getty Images for Quibi)

Short-video app Quibi said it is shutting down just six months after its early April launch, having struggled to find customers.

The Los-Angeles-based company said Wednesday that it would wind down its operations and plans to sell its assets.

"Quibi is not succeeding," its top executives bluntly declared in a letter posted online.

The video platform — designed for people who were out and about to watch on their phones — was one of a slew of new streaming services started to challenge Netflix over the past few years, most of which were part of much bigger tech and entertainment companies, like Apple and Disney.

Quibi, short for "quick bites," raised $1.75 billion US from investors including Hollywood players Disney, NBCUniversal and Viacom and its leadership were big names: entertainment industry heavyweight Jeffrey Katzenberg and former Hewlett-Packard CEO Meg Whitman.

But the service struggled to reach viewers, despite a 90-day free trial, as short videos abound on the internet and the coronavirus pandemic kept many people at home. Part of the appeal of the service, which started at $5 US a month, was supposed to be that you could watch short videos while out, without access to a TV. Being stuck at home made TV more desirable than watching on a phone, and Quibi only later and slowly rolled out TV options. Founder Katzenberg blamed the pandemic for Quibi's woes.

Katzenberg's connections helped line up stars to make and star in its videos, including Reese Witherspoon, Steven Spielberg and Jennifer Lopez. There was a short version of 60 Minutes and reality shows. The shows never achieved big name recognition, although the platform scored two Emmys earlier this year.

Why did it fail? "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," Katzenberg and Whitman wrote. "Unfortunately, we will never know but we suspect it's been a combination of the two."

Strong year for Netflix, Disney Plus

Quibi doesn't release subscriber figures. Mobile research firm Sensor Tower estimates 9.6 million installations of Quibi's mobile app since its launch; that doesn't mean those are actually users. Other streaming services have benefited from having customers stuck at home during the pandemic. One of the most successful new services, Disney Plus, has more than 60 million subscribers. Netflix has had a blockbuster year.

"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.

The company said that money from the sale of its assets will go toward paying off liabilities and whatever remains will be returned to investors.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

now