Called the Rival to Netflix... Quibi Shuts Down Just 6 Months After Launch

Low Viewership and Lawsuits Hinder Progress... Failure of Proprietary Content and Paid Business Models
Ultimately Bowing to Intensified Platform Competition

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Quibi, a video streaming service once considered a rival to Netflix, is shutting down its business just six months after its launch. Founded by Hollywood heavyweights including the DreamWorks founder, and securing $150 million worth of advertising before the service even launched, Quibi had promised a seismic shift in the streaming market. However, it was hampered by low viewership and lawsuits with competitors. It also failed to differentiate itself from rivals like Netflix, Disney+, and YouTube.

According to the Wall Street Journal (WSJ) on the 21st (local time), Quibi founder Jeffrey Katzenberg and CEO Meg Whitman stated during a conference call that "we have reviewed every option available to us, but all have been exhausted," explaining the decision to cease operations. This comes just half a year after the service launched in April.

WSJ, citing sources familiar with the matter, reported that "rather than incurring more losses to extend the company's lifespan, they chose to return the remaining $350 million to investors."

With Quibi's business closure, employees will receive severance pay and be laid off, while the company is reportedly exploring selling rights to some content to other media or IT companies.

Quibi was co-founded in 2018 by Hollywood mogul producer Jeffrey Katzenberg, DreamWorks founder, and Meg Whitman, former CEO of HP. At launch, it attracted significant attention by raising $1.175 billion (approximately 1.3318 trillion KRW) from investors. Targeting smartphone users, it proposed a business model offering short videos like TikTok but producing original content similar to Netflix. To increase revenue, it charged subscribers a monthly fee of $5. Early on, it garnered buzz by signing top Hollywood stars such as Reese Witherspoon and Jennifer Lopez.

However, the results were dismal once the service launched. According to The New York Times (NYT), in May Quibi fell to the 50th position in the iPhone App Store download rankings, with paid subscribers numbering only 1.3 million. Even considering the relatively short period since launch, this was low compared to Disney+'s 60 million and Netflix's 190 million subscribers.

Quibi's failure was predicted even before the service launched. Consumers were already watching short videos for free, so there was little incentive to choose a paid service. Additionally, the spread of COVID-19 this year led to more people watching TV at home instead of using smartphones. Quibi expanded its service to TV to address this.

Competition with similar novel media companies intensified. Services like Disney+, Apple TV+, HBO Max, and Peacock have emerged in the past year. Quibi's unique selling points disappeared. Its excessive copyright restrictions, which prevented consumers from actively sharing content, were also cited as a weakness. Quibi was also embroiled in a patent lawsuit with competitor Echo.

WSJ described Quibi's downfall as "the collapse of a famous entertainment startup that tried to revolutionize the way people consume entertainment."

This content was produced with the assistance of AI translation services.