# Quibi (2018 – 2020)

- URL: https://girisimcikafasi.com/en/startup-graveyard/quibi/
- Sector: Media and entertainment
- Country: United States
- Total funding: $1.8 billion
- Cause of closure: No market need

## What did it do?

Quibi was a paid streaming platform offering series, films and news programmes made up of short episodes designed to be watched only on mobile devices. The company commissioned its content from well-known Hollywood producers and actors, and in its first year spent more than a billion dollars on over 175 programmes.

## Why did it shut down?

The launch in April 2020 coincided with the period when the COVID-19 pandemic upended daily routines; Katzenberg blamed the problems on the pandemic. Downloads did not convert into paid subscriptions as hoped; the service was on course for 2 million subscribers, far below the 7.4 million projected for its first year. Features such as sharing and watching on a television were added only later. When efforts to find a buyer came to nothing, the company decided in October 2020 to shut down, and the service ended in December 2020.

## The story

$1.75 billion. That is how much a short-video service raised before its first episode went live and in the months that followed. Quibi described its content as “quick bites” and was the brainchild of Jeffrey Katzenberg.

The company was founded in Los Angeles in August 2018 under the name NewTV, with Meg Whitman as CEO. That same year it raised $1 billion from studios such as Disney, 21st Century Fox, NBCUniversal, Sony Pictures, WarnerMedia and Viacom, banks such as Goldman Sachs and JPMorgan Chase, and technology companies such as Alibaba Group. At the end of 2019 it announced that its $150 million of first-year advertising inventory had sold out. In its first year Quibi spent more than a billion dollars on 8,500 short episodes across more than 175 programmes.

The service launched in April 2020, just as the COVID-19 pandemic was upending daily routines. The first week brought 1.7 million downloads, but that interest did not turn into subscribers. Katzenberg admitted that performance was not what they had wanted and attributed all of the problems to the coronavirus. A sharing feature and the option to watch on a television were added later. By mid-June a further $750 million had been raised, but the service was on course for around 2 million subscribers, far short of the 7.4 million projected for its first year. In September 2020 reports emerged that the company was looking for a buyer.

On 21 October 2020, just six months after launch, The Wall Street Journal reported that the service would shut down. In an interview with Deadline Hollywood, Katzenberg said that carrying on “would not produce a different result” and would only mean spending far more money without creating value. When the decision was announced, Quibi had around 500,000 subscribers. The service closed in December 2020. In January 2021 Roku bought the content library for less than $100 million and streamed the shows as Roku Originals.

Quibi is perhaps the most expensive example of how capital and star names cannot stand in for user demand. The product was built around short episodes to be watched only on a phone; features users were used to, such as sharing and watching on a television, could only be added later. The billions spent before demand had been tested on a small scale did not come back when there were not enough subscribers willing to pay.

## Lessons

- A big budget does not change user behaviour; if you are proposing a new viewing habit, measure demand with a small pilot first.
- If you tie your product to a single moment of use (such as a short commute), plan for what happens when that moment disappears.
- Offer the sharing and screen features users are used to at launch, rather than adding them later.

## Sources

- [Quibi](https://en.wikipedia.org/wiki/Quibi)
- [Quibi's Jeffrey Katzenberg & Meg Whitman Detail "Clear-Eyed" Decision To Shut It Down & What's Next](https://deadline.com/2020/10/quibi-shuts-down-jeffrey-katzenberg-meg-whitman-interview-exclusive-1234601254/)
- [Quibi Is Officially Dead](https://variety.com/2020/digital/news/quibi-officially-shuts-down-1234842926/)
- [Roku Acquires Global Rights to 75-Plus Quibi Shows, Will Stream Them for Free](https://variety.com/2021/digital/news/roku-acquires-quibi-shows-free-streaming-1234881238/)
- [https://www.wikidata.org/wiki/Q65073105](https://www.wikidata.org/wiki/Q65073105)