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How ill-fated startup Quibi went from raising $1.75 billion before launch to shutting down just 6 months laterhttps://www.businessinsider.in/tech/news/how-ill-fated-startup-quibi-went-from-raising-1-75-billion-before-launch-to-shutting-down-just-6-months-later/slidelist/78833439.cms2020-10-23T22:07:02+05:30

How ill-fated startup Quibi went from raising $1.75 billion before launch to shutting down just 6 months later

Mary MeisenzahlOct 23, 2020, 22:07 IST

In August 2018, Jeffrey Katzenberg and Meg Whitman created NewTV, a digital video startup that aimed to create "snackable" short content for smartphones.

That month, NewTV revealed it had secured $1 billion in funding from big names including Walt Disney, Warner Media, and Alibaba Group. At this point, no content had been announced.

In October, they announced the service would be called Quibi, short for "quick bites." "Jeffrey can't stop saying the name Quibi," Whitman said. "I think that will be a fun name for us."

Quibi signed a 10 year lease for an undisclosed amount for 49,000 square feet of office space in Hollywood.

By December, Katzenberg was already predicting launching as soon as 2019, with a two tier price system.

At that point, the company had 48 employees.

"We have one chance to launch and we need it to be absolutely perfect," Whitman said at a Variety summit.

In July 2019, BBC Studios announced it had invested in Quibi.

So far, a Steven Spielberg horror short, an action series with Liam Hemsworth, and a remake of Punk'd had all been announced.

In August 2019, a source told Business Insider that Quibi was on a "hiring rampage," poaching talent from Snap and Netflix.

In October, Quibi announced that it had sold out $150 million in ads for its first year. Advertisers included Discover, Walmart, Taco Bell, and PepsiCo.

Potential customers got their first look at Quibi in February 2020, when it became available for preorder in the App store.

Quibi officially launched on April 6 for $4.99 per month with ads, or $7.99 without. It also offered a 90 day free trial.

Quibi had 300,000 downloads on its first day, compared to four million on Disney Plus's launch a few months earlier. It rose to the number three spot in the App Store.

Less than a week after launch, Whitman said that Quibi would eventually be available on TVs. She said that was "always" the plan but would be expedited because of coronavirus.

By April 16, Quibi had dropped out of the top 70 in the App Store, below Netflix, Hulu, and an ASMR slicing app. It remained in number 11 on the Google Play Store.

In May, with 3.5 million downloads, Katzenberg told The New York Times that the coronavirus was responsible for "everything that has gone wrong" with the app.

This statement was at odds with other streaming services. Netflix and Disney Plus saw booms during the pandemic.

By June, Quibi was asking executives to take voluntary pay cuts, and considering laying off 10% of its 250 employees.

As the first 90 day free trials expired in the summer, The Verge reported that only about eight percent converted into paid subscribers.

In July, Quibi started paying bloggers to write about its shows.

Recode reported that Quibi was unsuccessfully searching for a buyer, and exploring other options to raise money in September.

In October, The Wall Street Journal first reported that Quibi was shutting down after just six months.

Katzenberg and Whitman wrote a letter to investors and employees saying that the company failed because of the pandemic, and because the idea wasn't strong enough.

On a Wednesday call telling employees they would be laid off, Katzenberg told them to listen to the song "Get Back Up Again" from the movie "Trolls" to help lift their spirits.

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