Quibi, the struggling short-form streaming company founded by Jeffrey Katzenberg, is set to shut down just seven months after its launch, TheWrap has learned.
The short-form video service led by Katzenberg and Meg Whitman has called a meeting with senior management Wednesday night, an individual outside the company told TheWrap. The expectation is that the company will shut down and return what remains of its investors’ money.
Quibi declined to comment. Quibi raised nearly $2 billion to serve teenagers and young adults with short form entertainment, viewed primarily on their phones. But the paid service, which launched during the pandemic, has never gotten traction. Instead, free apps like TikTok have taken off as the platform of choice for teens.
A knowledgeable individual told TheWrap that Katzenberg has been trying to sell the content to other distributors in recent weeks, without success, largely because of the short-form serial format. “The content has to be re-edited to be legitimate,” said this individual. “It’s designed to have 10 minute breaks for commercials.”
Out of 910,000 people who downloaded Quibi in the three days following its April 6 launch, only 72,000 users converted to paying subscriptions, Sensor Tower reported in July. Quibi disputed that figure at the time, saying they were seeing “excellent conversion to paid subscribers – both among our 90-day free trial sign-ups from April, as well as our 14-day free trial sign-ups from May and June.”
Late Tuesday, The Information reported that Katzenberg “has told people in the industry that he may have to shut down the company,” citing an individual who spoke with him. On Wednesday, the Wall Street Journal also reported that Quibi has hired a restructuring firm to evaluate its options, with shutting the company down being one of them.
A separate report in Politico on Tuesday added that Whitman, who serves as Quibi’s CEO, is one of the names being looked at for a cabinet position should former Vice President Joe Biden win the presidency. Whitman, a registered Republican, also spoke during the Democratic National Convention in August.
Quibi launched in April but has badly underperformed in gaining subscribers in the ultra-competitive streaming space. Quibi was among five new entrants alongside Apple, Disney and WarnerMedia that launched within a 7-month span. CBS All Access is also rebranding as Paramount+ early next year.
It debuted with nearly $2 billion in funding and a who’s who of stars connected to the service, including Steven Spielberg, Jennifer Lopez, Kevin Hart and LeBron James. The service, led by Katzenberg and Whitman, managed to net two Emmy wins last month, but has otherwise struggled to gain a wide audience.
In June, Quibi was on pace to pull in 2 million subscribers by the end of the year — well below its own projection of 7.4 million subscribers. And in July, when the 90-day free trial Quibi had offered early users expired, most didn’t stick around to pay for their service. (Subscribers pay $4.99 per month for ad-supported streaming and $7.99 per month for ad-free streaming.)
TheWrap spoke with several early Quibi users a few months back to hear what they liked and didn’t like about the service. Some of those issues — including the inability to screenshot content and share it with friends — has since been resolved by Quibi. You can read the full story by clicking here.
Sharon Waxman contributed to this report