The struggling company has exhausted all options since it was launched during the epidemic, the letter says. After evaluating other strategic options, the board of Quibi decided to shut down the company and return the remaining cash to investors, and it plans to hire one or more buyers for its assets.
The only mobile streaming service was launched in April by Hollywood giants Katzenberg and Silicon Valley powerhouse Whitman. It offered mobile videos and series cut into bite-sized segments shorter than 10 minutes.
Unlike short-form videos from YouTube, Instagram, or Ticket OK, Qibi’s pitch to consumers was that it offered content created with a similarly large product budget over a wide range. He raised nearly 2 billion from investors, including Disney and Alibaba, and acquired top talent like Steven Spielberg and Jennifer Lopez.
“This is the biggest idea we’ve ever had,” K. Tusenberg said in the CNN business a year ago. “I know it will work.”
But Qibi was based on the vision that consumers would pay to see short flows while on the go – an idea that clearly failed to catch on in 2020, when most people were stuck at home due to the epidemic.
Andrew Hare, senior vice president of research at consulting firm Magid, said the basic problem was to solve (a new service was needed for short-form, paid premium video). “, Said CNN Business.
However, Katzenberg told CNN. Before launching the business, he said the company could benefit from the epidemic, adding that “quick-byte, super-premium Hollywood-quality content will now be considered more than ever.”
However, that was not the case.
Despite increased demand for other streaming services, Quibi never found an audience and struggled from launch. The app costs 99 4.99, and 99 7.99 per month with ads for subscriptions and customers just didn’t want to spend time or money on the app.
“Kibi is not succeeding,” Katzenberg and Whitman said in the letter. “Probably for two reasons: because the idea wasn’t strong enough to justify a single streaming service or because of our time. Unfortunately, we don’t know anything but we suspect it’s a combination of the two.”
According to Magid Hare, the epidemic was not the only culprit for Kibi’s failure.
“Streaming video belongs to a class that people are very comfortable using during an epidemic,” Hare said. “Just not Qibi.”
Jim Nell, chief analyst at Forrester, agreed, saying the epidemic gives “a good excuse” for Quibee’s failure but “the real problem was that the idea of episodic content in five-minute episodes is not what people are looking for on their smartphones.”
“They want six other goofy dance moves on the ticket ok or an impressive video on YouTube or Instagram,” Nell said. “While they want very content, high production content, they want them on the TV screen for 30 minutes or more where they can lose themselves in the story.”
Hare said the company also suffers from a “lack of social media virality”, an unfamiliar brand and its mobile-only proposal, meaning it was not available on connected TV for people watching at home during the epidemic.
“Simply put, the value proposition and use cases for customer adoption were not so strong.” “Was it competitive forces, pricing, distribution, messaging, epidemic? Yes, it was everything.”
“When we have enough capital to continue operations for a significant period of time, we made the difficult decision to reduce business transactions, return cash to our shareholders, and kindly bid farewell to our talented colleagues,” Whitman, who has served. The CEO of Quibi said in a statement on Wednesday.
The company said Qibi subscribers will receive notification of the platform’s access date.
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