The lockdowns that came with COVID did wonders for many streaming services, with most of us stuck inside with our devices and little else to do but binge. But one streaming service had the opposite luck: Quibi, the short-form streaming platform for mobile devices, is shutting down just six months after launching. On Oct. 21, the company announced the shutdown in an open letter penned to "employees, investors, and partners who believed in Quibi and made this business possible." To learn more about why Quibi is shutting down, read on, and for a big change coming to another streaming service, check out Netflix Just Quietly Removed This Key Feature.
Quibi featured shows parsed into five to ten-minute "chapters" to satisfy U.S. viewers on the go and those with shorter attention spans. However, once COVID hit, consumers had little use for mobile entertainment as, instead of buying busy, they had hours to fill with binge-watching, instead of looking for short-form content.
Quibi boasted star-studded shows featuring Chrissy Teigen, Joe Jonas, Jennifer Lopez, and Reese Witherspoon, among others. The platform was also behind #FreeRayshawn, a series about an Iraq war vet that won two Emmys this season.
In their the letter cofounders, Jeffrey Katzenberg (former DreamWorks Animation CEO) and Meg Whitman (former HP CEO) wrote, "It is with an incredibly heavy heart that today we are announcing that we are winding down the business and looking to sell its content and technology assets. Quibi was a big idea and there was no one who wanted to make a success of it more than we did. Our failure was not for lack of trying; we've considered and exhausted every option available to us."
Quibi had raised $1.75 billion in venture funding from major companies including AT&T's WarnerMedia, Comcast's NBCUniversal, Disney, ViacomCBS, MGM, and Sony, according to Yahoo Finance. But even billions weren't enough to keep the company afloat.
Some of Quibi's issues stemmed from its big salaries to woo actors. For example, Page Six reports that Quibi paid Witherspoon $6 million to voice the feminist nature documentary, Fierce Queens. The company continuously cut stars large checks while executing layoffs and pay cuts to employees, the paper reports.
Additionally, Quibi faced multiple lawsuits from video startup Eko. According to Variety, Eko "alleges that Quibi stole its patented technique to allow viewers of cellphone video to toggle between landscape and portrait mode. Quibi contends that it independently created the technology, dubbed Turnstyle, which is one of its unique selling points." It was a battle Quibi ultimately won, but it came at a cost.
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While all of these struggles contributed to the downfall of Quibi, it also seemed doomed from the beginning. Yahoo Finance reports that the app saw 1.7 million free downloads in its first week. But, according to SensorTower data, among those who downloaded the service initially for free, only 8 percent opted for a paid subscription after just three days.
According to the letter announcing the end of Quibi, the company is now seeking to sell its content and technology assets to buyers "who can leverage them to their full potential."
And for another change from a tech giant, check out Apple Just Discontinued This Popular Phone.
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