The mobile-video service Quibi is shutting down just six months after launch, the company announced Wednesday night.
The news was first reported by The Wall Street Journal’s Benjamin Mullin.
“We have reluctantly come to the difficult decision to wind down the business, return cash to our shareholders, and say goodbye to our colleagues with grace,” founder Jeffrey Katzenberg and CEO Meg Whitman wrote in an open letter to investors, employees, and supporters. “We want you to know we did not give up on this idea without a fight.”
The streaming service raised $1.75 billion from investors like Walmart, PepsiCo, and Anheuser-Busch ahead of its launch in April. But Quibi has struggled to gain viewers, which has resulted in lucrative advertising deals being put on hold, The Journal reported.
Last month, The Journal reported that Quibi was exploring multiple options, including a sale. Katzenberg had recently told people he may have to shut down the company, The Information reported on Tuesday.
Despite the big-name investors and powerful names attached to the service — including former Hewlett Packard Enterprise CEO Whitman at the helm — Quibi has struggled to gain a foothold in the streaming industry since its launch.
The service was intended to be used on the go, but the timing of its launch coincided with the coronavirus outbreak, which meant fewer people commuting and an economic downtown that may have made customers hesitant to pay for a subscription. And despite a roster of impressive Hollywood talent — including Liam Hemsworth and Anna Kendrick — none of Quibi’s shows have become major hits.
Quibi is also the subject of a patent lawsuit over the technology it uses to rotate videos based on the orientation of the user’s phone.
In the letter, Whitman and Katzenberg acknowledged the challenges Quibi has faced, saying the company isn’t succeeding because “the idea itself wasn’t strong enough to justify a standalone streaming service” and because of the pandemic.
“The circumstances of launching during a pandemic is something we could have never imagined but other businesses have faced these unprecedented challenges and have found their way through it. We were not able to do so,” they wrote.
They said that in the coming months, they’ll look to find buyers for Quibi’s original content and its underlying technology platform.
“All that is left now is to offer a profound apology for disappointing you and, ultimately, for letting you down,” they wrote.
