- Quibi, the mobile-video startup that raised $1.75 billion from backers like Alibaba Group, JPMorgan Chase, and Disney, is folding six months after debuting its subscription service.
- The Jeffrey Katzenberg-founded startup said in a statement that its demise was likely caused by a combination of an idea that wasn't strong enough and poor timing.
- But Quibi's failure ultimately comes back to a slate of content that did not break through with its target audience of 25- to 35-year-olds.
- That falls on Katzenberg, who insiders previously told Business Insider was hyper-involved in programming decisions, from greenlighting shows to ground-level decisions like casting and wardrobe.
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During a pandemic in which streaming viewership boomed, mobile-video service Quibi lasted only six months.
The Jeffrey Katzenberg-founded startup, which raised $1.75 billion in funding, said in a statement announcing its winding-down on Wednesday that its failure was likely caused by a combination of an idea that wasn't strong enough and poor timing.
Quibi took a risk in betting that millennials would pay for a streaming service with episodes under 10 minutes that could only be watched only on their smartphones. The risk was even greater when the pandemic forced people to remain at home, removing what Quibi perceived as its primary use case, the in-between moments of people's days when they waited in line at Kroger or on the subway.
But Quibi's failure ultimately comes back to a slate of content that did not break through with its target audience of 25- to 35-year-olds.
Shows like "Chrissy's Court" with Chrissy Teigen attracted enough eyeballs for Quibi to order second seasons. And the police drama "#FreeRayshawn" earned Quibi Emmys acclaim. Yet neither show, nor Quibi titles starring Liam Hemsworth, Anna Kendrick, Kevin Hart, and others, swayed enough people to pull out their credit cards to subscribe.
"We're proud of the content that we made," Katzenberg told CNBC's "Squawk Alley" on Thursday. "Emmy award-winning content in a very short period of time. We're proud of the product and the engineering team and what they built. But in the end we did not get the acceptance of consumers and customers in a way in which we had to in order for this to be a successful business."
While Meg Whitman was Quibi's CEO, Katzenberg, its founder and chairman, was the driving force behind many of Quibi's programming decisions, insiders previously told Business Insider.
And at the end of the day, content is make or break for streaming services in 2020. Netflix, the streaming-video frontrunner, underscored that reality earlier this year when it promoted its content chief as co-CEO alongside its Silicon Valley-rooted founder.
Katzenberg is a seasoned Hollywood exec, who put Disney's animation studio back on the map in the 1980s and 1990s, and cofounded and led DreamWorks to classics like "Shrek" and "Kung Fu Panda."
He worked closely with Quibi's content team that commissioned programming for its mobile platform.
Read the full story: 15 Quibi insiders detail Jeffrey Katzenberg's tight control of the startup's content and intense leadership as he tries to avoid disaster after raising $1.8 billion
Multiple people close to the company said Katzenberg personally greenlit many of the shows on Quibi. He was also intimately involved with ground-level decisions, including casting, wardrobe, and set decoration, several production partners said.
Katzenberg's reputation loomed large within the startup, as well. Two people close to the company said the content team, many of whom were in their 30s and 40s, often deferred to Katzenberg's judgment, even when they disagreed.
Read the full story: Quibi insiders describe the intense feedback the mobile-video startup gives show creators: 'There are notes and then there are Quibi notes'
Under Katzenberg's leadership, Quibi's content team struggled to use online influencers, who had massive followings among the platform's target audience, to their full advantage.
Quibi released shows by digital creators like Liza Koshy, Tony Greenhand, and Kirby Jenner, and featured influencers like TikTok star Addison Rae. But in trying to distinguish itself from the content on platforms like YouTube, Instagram, and TikTok, Quibi often put these influencers in familiar TV formats — like Liza Koshy's series "Floored," a dance competition series that also puts the contestants through obstacles in the style of the network series like "Wipeout," or Rachel Hollis' talk show.
One YouTube manager whose client pitched Quibi said that the company dismissed some ideas as "YouTuber ideas."
"If it can be on YouTube, it can't be on Quibi," Katzenberg was known to say, other sources close to the company said.
Read the full story: Quibi says influencers are a key part of its strategy but insiders say it repeatedly dismissed 'YouTuber ideas' in favor of familiar TV formats
In some ways, Katzenberg's heavy influence on Quibi is no different from Silicon Valley founders like Steve Jobs, Mark Zuckerberg, or Elon Musk.
Employees, content creators, advertisers, investors, and other partners bought into Quibi because they bought into Katzenberg's vision.
Read the full story: A Quibi investor says the startup should have tried to 'fight more' but that he'll be happy if he can get 50% of his investment back
But that also means Katzenberg is responsible for Quibi's legacy.
Currently, the executive is still banking on Quibi's content slate to help it save some face. Quibi is trying to sell the rights to the content it licensed as well as its technology, to help return more money to its investors.
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