Popular and recently founded mobile streaming platform Quibi is soon shutting down after its founders Jeffrey Katzenberg and Meg Whitman collected over $2 billion in start-up capital to get it up and running.
The streaming service that was launched with lots of expectations and fanfare is sadly closing shop with it officially shutting down soon according to reports by Deadline.
Katzenberg and CEO Whitman held a video call with investors a few hours ago to explain their decision to shut down Quibi after a little more than six months. The meeting was followed by one with staff to share the news about its closure.
At the moment, the management team is exploring various options including selling of content, as it has 100 shows already up. There’s also the option of selling the entire service too should an interested buyer emerge though none has come up yet based on reports.
Right now, Quibi is trying to recover what was invested in it including what’s owed to creditors which is believed to be about $350 million (UGX 1,306,903,500,000), minus that left from the roughly $1.8 billion in capital that was raised from a group of media companies, venture firms, investment banks and individual backers.
The process of bringing Quibi to a close is expected to take several months, with subscribers receiving notifications in the near future. In an open letter to “employees, investors and partners” posted online, Katzenberg and Whitman wrote, “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 launched in April just as the world was getting its economy beat up by COVID-19, which could be one of the reasons as to why the start-up struggled to keep the lights on as many businesses kept failing left and right.
Quibi shutting down after a short time in service
The service coming to an end has sent a big shock in the media industry given the fact that it had a lot of financial backing from big Hollywood names and companies who still can’t believe how a billion-dollar start-up failed to pull through.
The closure of Quibi will be putting to risk the jobs of about 200 employees as if the year 2020 hasn’t already been a tough one for the entertainment industry and several other businesses that have been hit hard by the pandemic.
Among the top backers of the streaming service include Hollywood players like Disney, eOne, Fox, ITV, Lionsgate, MGM, NBC Universal, Sony Pictures, Viacom, and WarnerMedia. Technology investors include e-commerce giant Alibaba.
Strategic partner investors include Goldman Sachs, JPMorgan Chase, Liberty Global and Madrone Capital, the last of which led the round. BBC also invested in the idea too.
“Quibi was founded to create the next generation of storytelling,” Katzenberg said in a press release. “We have assembled a world-class creative and engineering team that has created an original platform fuelled by groundbreaking technology and IP, enabling consumers to view the premium content in a whole new way. The world has changed dramatically since Quibi launched and our stand-alone business model is no longer viable. I am deeply grateful to our employees, investors, talent, studio partners and advertisers for their partnership in bringing Quibi to millions of mobile devices.”
Whitman reiterated her prior assertions that the company had adequate capital to continue operating for several more months. Instead, she said, “We made the difficult decision to wind down the business, return cash to our shareholders, and say goodbye to our talented colleagues with grace.”
She added, “We continue to believe that there is an attractive market for premium, short-form content. Over the coming months we will be working hard to find buyers for these valuable assets who can leverage them to their full potential.”
Despite all the talented people on board and the luckily-hood of the venture being a success, Quibi’s launch was definitely hit hard when the coronavirus came knocking on the door, which only complicated their idea of an on-the-go concept.
Will other streaming services survive in 2020, or will they fall prey to the current economic climate which has only made things harder for the entertainment sector in general.
Read more on the story right via Deadline.
Author: Allan Bangirana
Allan Bangirana has a taste for all kinds of topics and usually writes about tech, entertainment, sports and community projects that make a difference in society.