Quibi’s abridged video group calls for closure after six months

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The Quibi streaming service will not close until six months after its launch, according to people familiar with the matter, ending Jeffrey Katzenberg’s $ 1.8 billion bet on the short video.

Developed by Disney veteran and Meg Whitman, former CEO of Hewlett-Packard, Quibi had managed to raise billions from Hollywood’s biggest names with the idea of ​​selling “quick bites” of carefully produced entertainment to brands. millennia on the move.

But the well-funded startup quickly turned into a costly failure in the industry-wide streaming battle, as the biggest groups in Hollywood and Silicon Valley vie with Netflix for the future of entertainment.

Ms Whitman said in a statement: “Although we have enough capital to continue operating for a significant period of time, we have made the difficult decision to end the business, to return money to our shareholders. and to say goodbye to our talented colleagues with grace. ”

Quibi planned to return the remaining $ 350 million of the $ 1.75 billion it had raised to investors, people familiar with the matter said.

This capital came from investors including Alibaba, Disney, Viacom, all the major Hollywood studios, Liberty Global, Goldman Sachs, JPMorgan and the Walton family, the founders of Walmart.

Quibi has spent hundreds of millions of dollars recruiting top directors like Steven Spielberg, as well as celebrities like LeBron James and Chrissy Teigen, to make shows for his app, promising quality scripted shows and documentaries. cinematographic, daily news and sports. The service was free for 90 days, before charging $ 8 per month or $ 5 per month with ads.

Investors had hoped Quibi could secure around 20 million subscribers over five years and generate $ 2 billion in revenue, about a third of which would come from advertising.

However, by the time Quibi debuted in April, the coronavirus had put an end to the commutes and cafes for which its ‘quick bite’ content was designed. In May, Mr Katzenberg, founder of DreamWorks, said, “I attribute everything that is wrong to the coronavirus.”

The company struggled to convince people to pay for the app. Mr Katzenberg has surveyed potential buyers in recent weeks but has not been able to strike a deal, people familiar with the matter said.

Quibi had faced considerable skepticism before his arrival. Analysts wondered how Mr Katzenberg and Ms Whitman, aged 69 and 64 respectively, could run an innovative short-form mobile video start-up for young people, or whether people would pay for it in the middle of a sea ​​streaming subscriptions.

But many in Hollywood were reluctant to bet against Mr. Katzenberg, who had built a reputation for his tenacity and success at Disney and DreamWorks. “No one can say no to Jeffrey,” said one Quibi investor. “He doesn’t let you say no.”

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