Hollywood-Backed Quibi Headed For Shutdown After Squandering Nearly $2BN In 6 Months

Hollywood-Backed Quibi Headed For Shutdown After Squandering Nearly $2BN In 6 Months

Tyler Durden

Wed, 10/21/2020 – 18:00

It looks like we can officially add Quibi to the growing list of unicorns that have been slaughtered by the coronavirus pandemic.

According to the Wall Street Journal’s latest report on the doomed Hollywood-backed Netflix competitor, Quibi’s management has accepted the fact that it will likely need to shut down, and return capital to investors, following a difficult reckoning with a team of expensive consultants.

The last time we checked in on Quibi, co-founders Meg Whitman and Jeffrey Katzenberg (the project was originally conceived by the former Walt Diseny Studios head and Dreamworks Mastermind, and he then brought Meg Whitman on to “execute” his vision for a mobile-only Netflix), Katzenberg had reluctantly ‘fessed up to the board that Quibi was in serious trouble. Quibi raised nearly $2 billion, and in just six months, it hasn’t brought in anything close to a sustainable revenue stream.

To try and chart a path forward, Quibi made the decision a few weeks back to bring on an expensive team of consultants to put together a list of options. That list has beepooo

Previous reports about Quibi described a company where Whitman and Katzenberg, two indisputable titans in the tech industry, surrounded themselves with ‘yes men’. In meetings, staffers were afraid to challenge their bosses, which is how ideas like being ‘mobile exclusive’ came about.

When Quibi premiered in April, critics lazily expected it to rack up a sizable following, due to its pedigree. But users quickly became frustrated when they realized they couldn’t stream Quibi’s content on their TVs. At this point, Quibi was targeting a market – the American commuter – that had greatly diminished in size.

To be sure, Quibi’s lineup got surprisingly creative at points, like with “Dummy”, a short series about a millennial woman who befriends her boyfriend’s sex doll.

A scene from “Dummy”

As this reality sunk in, critics and viewers alike were confronting another issue: for all the hundreds of millions of dollars Quibi had sunk into programming, the company had failed to produce anything even close to resembling a hit.

Katzenberg and Whitman are expected to host a call with the company’s backers on Wednesday where they could make an announcement about whether Quibi will be shuttered, or whether the company might persue a deal. While Quibi has tried to market its “library of content” as an attractive selling point, the company is also currently mired in a lawsuit with a much smaller technology firm called Eko, which claims Quibi stole its mobile-streaming technology from Eko.

While Katzenberg has taken to blaming COVID-19 for Quibi’s failure, we believe that boomer arrogance and egotism played just as big a role. This is plainly evident in one of Whitman’s first interviews with CNBC on the topic early last year.

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Author: Tyler Durden