As of Tuesday, Quibi, a subscription streaming-video service into which Jeffrey Katzenberg sunk $1.75 billion, is inoperable. The app, which will still appear on users’ devices, no longer allows those who have downloaded it to sign in or access any content.
In October, Quibi announced that the company was shutting down, seven months after being launched on April 6. The startup, founded by Katzenberg and CEO Meg Whitman, offered subscribers 10 minute “quick bite” originals with known Hollywood actors.
Although it spent millions on new series, Quibi failed to attract viewers or compete with other new streaming services like Disney Plus, HBO Max and Peacock. Katzenberg and Whitman thought Quibi would allow users to watch high-quality entertainment on the go, but it appears most people are rarely invested in series outside the home.
Given that most people can easily access mobile video apps like TikTok, Instagram, Snapchat and YouTube for free from anywhere, Quibi, which cost cost $4.99 (with ads) and $7.99 (without ads) per month, made little sense as a remote streaming service. As of the third quarter of 2020, Quibi had 710,000 subscribers, down from 1.1 million the previous quarter.
The app has already deleted its social accounts on Twitter, Facebook and Instagram and the company reportedly has informed investors, which included Disney, NBCUniversal, WarnerMedia and ViacomCBS, that it would refund their $350 million of their $1.75 billion contribution.
Meanwhile, Eko, an interactive-video company funded by companies like Walmart and hedge fund Elliott Management, is attempting to recover nearly $100 million in damages from Quibi, alleging that Quibi’s Turnstyle video-toggling feature had infringed its patents and Katzenberg had stolen trade secrets. The company denies the claims.
Industry insiders think Katzenberg, who was a prominent movie producer prior to launching Quibi, will now focus on his WndrCo holding company. “I think he will go off the grid for a while to lick his wounds,” one source told Variety. “This one must be very painful for him, because it was so high profile — and it failed so fast.”
Source: Variety