Quibi

Quibi raised $1.75 billion before launch to sell short, expensive shows made for phones. It announced its shutdown just over six months after launch.

What it was

Quibi was a paid streaming service for phones, built on episodes of 10 minutes or less that CNBC described as "quick bites".

Jeffrey Katzenberg, a co-founder of DreamWorks Animation, founded it. Meg Whitman, who had led eBay and Hewlett Packard Enterprise, was its CEO.

Whitman told TechCrunch before launch that YouTube content was made "for hundreds of dollars a minute" and Quibi's "for $100,000 a minute." At launch, Quibi's US plans cost $4.99 a month with ads or $7.99 without, after a 90-day free trial for anyone who signed up before the end of April 2020.

It was mobile-only, with "no smart TV app, no Chromecast or AirPlay compatibility," TechCrunch's Brian Heater wrote later.

What happened

Quibi launched on April 6, 2020, with nearly 50 shows, just weeks after the pandemic hit the US.

It reached No. 3 in the App Store with 300,000 iOS downloads, TechCrunch reported, then fell 122 places by early May, according to Sensor Tower figures.

Quibi added AirPlay and Chromecast in late May and screenshots in September, TechCrunch reported.

Over the summer it tried free trials of different lengths and moved its marketing to individual shows, Whitman told Deadline in October. It also tested a free, ad-supported tier in Australia and New Zealand, The Verge reported.

Weeks before the shutdown announcement, Quibi had about 500,000 subscribers against a first-year projection of more than 7 million, CNBC reported, citing people familiar with the matter. Its TV apps launched the day before the announcement, according to NBC News.

On October 21, 2020, Katzenberg and Whitman wrote in an open letter that they were "winding down the business and looking to sell its content and technology assets." Whitman told CNBC the next day that it had at least $350 million in cash.

The app stopped working on December 1, 2020, Variety reported.

In January 2021, Roku said it had acquired Quibi's content distribution rights, without disclosing the terms. MacRumors, citing The Wall Street Journal, reported a price of less than $100 million.

Why it failed

Quibi's founder and CEO blamed the idea, the pandemic timing or a mix of the two. Most reporting at the time added the phone-only design and competition from free video apps.

What Quibi said

Katzenberg and Whitman's open letter gave two likely reasons Quibi wasn't succeeding. Either the idea "wasn't strong enough to justify a standalone streaming service," or it was "because of our timing."

They wrote that "we will never know," but suspected "a combination of the two," and noted that other businesses had found their way through the pandemic when Quibi hadn't.

In May 2020, Katzenberg told The New York Times, "I attribute everything that has gone wrong to coronavirus," The Hollywood Reporter reported.

On the day of the announcement, he told Deadline that "we just were not scaling fast enough" for what Quibi was spending on content, and that it was "not solely a victim of COVID." Whitman said they "needed more capital."

She defended the phone-only design there too, saying the team "really thought our use case was 7 in the morning 'til 7 at night while you were on the go."

The next day, Katzenberg called his May remark "a little bit of a flippant answer" on CNBC, NBC News reported, and said "simply blaming it on Covid is not fair." He also told CNBC, "We asked people to pay for it before they actually understood what it was."

Neither the letter nor those interviews named free video apps, phone-only viewing or the screenshot block as a cause. Katzenberg had brushed off the TikTok comparison in May 2020, telling The New York Times it was "like comparing apples to submarines."

What reporting showed

In his launch review, TechCrunch's Anthony Ha noted the app was built for moments like "waiting in line," which were "happening considerably less often" as people were advised to shelter in place.

By May, users on social media were complaining that they couldn't share clips or watch on their TVs, The Hollywood Reporter wrote.

Variety said Quibi failed to attract a sizable customer base amid subscription streaming rivals and free video in apps "like Snapchat, TikTok, Instagram and YouTube."

LightShed Partners analyst Rich Greenfield told NBC News it was hard to break in "especially as a subscription app without a free initial offering," though NBC noted the 90-day trial.

Heater wrote that the limits Quibi set on purpose to stand apart, like phone-only viewing and the screenshot ban, played a large part in hobbling "a service that no one seemed to really want in the first place."

"Even if the pandemic didn't happen, Quibi would have failed," Julia Alexander wrote in The Verge.

What later analysis found

The fullest later accounts come from insiders, not independent analysts.

Katzenberg told the Upfront Summit in March 2022, "We didn't have product-market fit," dot.LA reported. dot.LA tied the remark to the pandemic launch, so it doesn't settle the idea against the timing.

Tom Conrad, Quibi's former chief product officer, went further on Lenny's Podcast in November 2023. He said Quibi bet it could build a big enough library of original shows "for a couple billion dollars," but "the math was just wrong," and it "was going to take 6 or 8 or 10 billion."

The model also required Quibi to "land in the top 10 and stay there forever," he said. With content costing a billion dollars a year, "you just can't afford to not be a hit," and you "can't spend two years iterating your way" to better funnels.

The stage it reached

Quibi died in the introduction stage, which the product life cycle guide describes as the launch period, when awareness is low and sales are small.

It leaned on a free trial and changed its pricing within months, both marks of the stage. In May 2020, Sensor Tower put its installs at 2.9 million, "thanks in large part to the free trial," TechCrunch reported.

It never reached growth, so I count it as a failure, not a decline. Kantar estimated 710,000 subscriber households in the third quarter of 2020, down from the quarter before, according to Variety.

Like OpenAI's Sora app, another short-video app, Quibi announced its end about six months after launch.

The lesson

I think the pandemic is the least useful part of Quibi's story, because nobody can plan for one. You can plan for a cost structure that needs a hit on day one.

Quibi had that structure before it launched. Its CTO, Rob Post, told reporters in a pre-launch briefing, TechCrunch reported, "There was no room for [Chief Product Officer Tom Conrad] and I to deliver a minimum viable product."

The introduction stage is where you're supposed to learn cheaply. Quibi's plan took that stage away. That's what I meant in my list of failed products when I called Quibi what happens when a big budget gets mistaken for product market fit.

If your plan only works when launch goes right, cut the first release down until a slow start is survivable, and write down the numbers that would make you stop. Quibi did stop, with cash left to return. That part I'd copy.