Quibi, the short-form video app based by Hollywood mogul Jeffrey Katzenberg, is asking it quits simply six months after its launch, in keeping with studies.
The high-profile startup — which raised a whopping $1.75 billion for an ill-fated launch this spring that coincided with the beginning of the COVID-19 pandemic throughout the US — is shutting down amid slumping demand for its short-form movies, the Wall Avenue Journal reported Wednesday.
The shutdown marks a stunning finish to Hollywood mogul Katzenberg’s plan to create a brand new class of leisure that catered to individuals on the go. In a bid to create a high-profile library of quick movies — most of them just some minutes lengthy — Katzenberg had lured A-list stars like Jennifer Lopez, Kevin Hart and Nick Jonas.
The Journal mentioned the previous Disney exec was informing traders that the corporate is closing after it just lately employed a restructuring agency to judge its choices.
A Quibi spokeswoman declined to remark.
Stories of Quibi’s closure adopted an article on Tuesday from The Info that claimed Katzenberg had tried to promote Quibi’s catalog of programming to firms akin to NBCUniversal and Fb, with none success.
Sources advised The Submit that Katzenberg has been telling individuals in Hollywood that he may need to close down the corporate. Based on The Info, Quibi staffers have been cancelling “important strategy meetings” and have been “informally scheduling goodbye drinks.”
“This is a giant meltdown,” mentioned Eric Schiffer, chief govt of personal fairness agency The Patriarch Group. “It is a modern-day Hindenburg within the digital and entertainment arena.”
Schiffer mentioned it’s doubtless that Quibi opts for a so-called “ABC liquidation,” or task for the advantage of collectors. Such a liquidation would permit Katzenberg and chief govt officer Meg Whitman to keep away from the stench of chapter, and assign Quibi’s property to a 3rd occasion. That third occasion would then unload the property and repay collectors.
Schiffer famous that Quibi’s content material library, which features a courtroom actuality present with Chrissy Teigen, referred to as “Chrissy’s Court,” “The Andy Cohen Diaries,” an animated present based mostly on Cohen’s journals and a horror anthology from Sam Raimi referred to as “50 States of Fright,” will doubtless be bought at “fire sale prices,” “percentages on the dollar.”
Information of Quibi’s demise started trickling in final month amid rumors of a strategic assessment of the corporate. Hampered by stiff competitors from the likes of streaming giants Netflix, Disney+, short-form video apps YouTube and TikTok, Quibi was by no means capable of meaningfully develop its subscriber base. With lower-than-expected viewership, blue chip advertisers like PepsiCo, Walmart and Anheuser Busch, started deferring their funds.
Quibi can also be going through a high-stakes lawsuit from rival Eko, which is funded by billionaire backer Paul Singer.
A month into enterprise, Katzenberg blamed the coronavirus for Quibi’s poor begin, complaining that the app is supposed to be watched by way of smartphone in on the go conditions.
Media critics didn’t purchase that logic, as house-bound prospects have extra free time to observe reveals than ever.
“Suddenly you drop your phone because you’re at home? It’s not logical,” mentioned Schiffer.
Tal Chalozin, the co-founder and chief know-how officer of internet advertising and tech agency Innovid, mentioned coronavirus lockdowns really boosted the viewership of companies like Netflix, Hulu, Snap and Disney+.
“Viewership is at an all-time high even if ad dollars are limited,” he mentioned, noting that the true drawback was that Katzenberg tried to launch a service with an unknown model and restricted content material.
With all of the well-known rivals already on the market, he mentioned that it’s “close to impossible” to succeed.
“The window is closing if not closed already on streaming services — especially an unbranded one,” he mentioned.