Jeffrey Katzenberg’s short-form video platform Quibi is exploring strategic options including a possible sale as it struggles to break through in a competitive streaming landscape, the Wall Street Journal reported Monday.
Quibi launched April 6 as COVID-19 was sweeping across the U.S. and much of the world. It was aiming to bring high-end, Netflix-like programming to mobile phones as people were stuck in shelter at home mode. The Journal said Quibi is also considering raising additional cash or merging with a special purpose acquisition company, or SPAC, a popular financial vehicle of late.
A Quibi spokesperson said the company doesn’t comment on rumor or speculation, adding, “Quibi has successfully launched a new business and pioneered a new form of storytelling and state-of-the-art platform. Meg and Jeffrey are committed to continuing to build the business in the way that gives the greatest experience for customers, greatest value for shareholders and greatest opportunity for employees.”
Quibi launched with a reported $1.75 billion in investment from a host of blue chip backers for shows in a variety of genres that are all under ten minutes long (thus the name, which is short for “quick bites.” It debuted for $4.99 with ads and $7.99 without. It won two Emmy awards this past week for police drama #FreeRayshawn and earned a mention by host Jimmy Kimmel in his opening monologue on the ABC telecast.
“Congrats are in order for a young Emmy upstart named named Quibi that has 10 nominations, including Outstanding Short-Form Drama Series and Dumbest Thing to Ever Cost $1 Billion,” Kimmer cracked.
Founder Katzenberg and CEO Meg Whitman have blamed COVID-19 for the company’s underwhelming start. Through its first two months, it attracted 4.5 million app downloads and 1.6 million subscribers. Critics, however, pointed out that TikTok and Snapchat managed to grow significantly through the middle months of 2020, despite the pandemic.
In an appearance in June at SeriesFest, a Denver festival held online this year, Katzenberg described COVID-19 as a “brick wall” the company hit. He argued that the slow provided “almost a beta” period giving the start-up a chance to regroup.
Other headwinds have included a legal battle with Eko, which has claimed Quibi stole its technology to power its Turnstyle interface. Several senior-level staffers have also left the company in the early going and the economic downturn required the company to implement austerity measures, though it denied reports of layoffs last spring.
Advertising for Quibi has ticked up in recent months, returning the Quibi brand to the public eye in the most significant way since its splashy launch in early 2020. It had ads on the Super Bowl and Academy Awards telecasts on the heels of a major push at CES in Las Vegas. On Sunday night’s Emmy broadcast, an ad ran for Quibi show Most Dangerous Game.
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