Los Angeles-based Quibi Holdings LLC, the mobile video startup led by founder Jeffrey Katzenberg and CEO Meg Whitman, is closing after a lower-than-expected viewership and a lawsuit from a competitor, the newspaper reported.
The company confirmed in a statement that it intends “to wind down its business operations and initiate a process to sell its assets.”
The remaining funds -- from its $1.75 billion in funding -- “will be returned to its investors as specified in the company’s operating agreement,” the company said in a statement.
The streaming service, which launched on April 6, provided customers with 5- to 10-minute “chapters” -- “one quick bite at a time” -- that were formatted to fit a smartphone screen. Subscriptions were sold at $4.99 per month with advertising and $7.99 per month without ads, Variety reported.
Quibi raised $1.75 billion in funding before launching, according to The Hill. Katzenberg was able to sign stars such as Reese Witherspoon, Jennifer Lopez, Chrissy Teigen, Liam Hemsworth, Chance the Rapper and Nicole Richie, the website reported.
“Quibi was founded to create the next generation of storytelling,” Katzenberg said in a statement. “We have assembled a world-class creative and engineering team that has created an original platform fueled by groundbreaking technology and IP, enabling consumers to view premium content in a whole new way. The world has changed dramatically since Quibi launched and our standalone 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.”
According to The New York Times in May, Quibi fell out of the top 50 most downloaded free iPhone apps, with only 1.3 million active users.
The app was created to appeal to a younger demographic of viewers eager to watch short videos while on the go, The Wall Street Journal reported. However, Quibi launched just after the coronavirus pandemic hit the United States and viewers decided to use streaming services like Netflix and Disney+, which gave subscribers the option to view content on television. Quibi eventually allowed subscribers to watch its shows on their televisions.
© 2020 Cox Media Group