lagued with growth issues, Quibi, a short-form mobile-native video platform, is shutting down, consistent with multiple reports. The startup, co-founded by Jeffrey Katzenberg and Meg Whitman, had raised nearly $2 billion in its lifetime as a personal company. Quibi didn’t answer requests for comment from TechCrunch.
The company’s prolific fundraising efforts spanned prominent institutions privately equity, risk capital and Hollywood, all depending on Katzenberg’s ability to deliver another hit. The startup’s backers included Alibaba, Madrone Capital Partners, Goldman Sachs and JPMorgan, also as Disney, Sony Pictures, Viacom, WarnerMedia and MGM, among others. the knowledge reports that Quibi will have $350 million left to return to shareholders.
Their pitch was highly produced bite-sized content, full of Hollywood star power, and designed to be “mobile-first” entertainment. For the YouTubes and Snaps of the planet , producing mainstream content on a shoestring budget, Quibi wanted to be an HBO for smartphones. Investors and pundits questioned the firm’s ability to monetize this vision, and it became clear soon after launch that the corporate had miscalculated.
Rumors that Quibi was shutting down began early in the week . the knowledge wrote that Katzenberg has told people within the industry that the corporate might got to pack up , after unsuccessfully pitching itself as a purchase to Apple, Facebook and Warner Media.
In its first few months, Quibi was downloaded 3.5 million times and had 1.5 million active users. While those figures aren’t too shabby, the corporate had to regulate its original projections, which put the service on a trajectory to succeed in 7 million users and $250 million in subscriber revenue in its first year. Admitting that the launch hadn’t gone as planned, Katzenberg blamed the coronavirus for the streaming app’s challenges.
The company expanded in Australia in August with a free ad-supported tier for users. it’s unclear if the tweak within the business model brought Quibi success, or if the issues for the app had to try to to with the business model within the first place.
Netflix earnings from earlier in the week suggest that the pandemic entertainment boom is slowing. the buyer video service disappointed on new paying customer numbers, and shares were down sharply yesterday after it released its income statement . Those numbers also potentially showcase just how crowded the marketplace for subscription video content has gotten within the past 12 months, with players like Apple, Disney, HBO and NBC each launching new services and collectively spending billions to accumulate rights to past television hits.