In a spectacular crash-landing, streaming service startup Quibi announced that it will be shutting down the service after it raised $1.75 billion in capital but failed to capture a mobile audience forced inside because of the coronavirus pandemic.
According to the Wall Street Journal (opens in new tab), Quibi founder Jeffrey Katzenberg called investors to inform them of the shutdown on Wednesday. Quibi, once a highly-promoted startup in the video streaming space, sought to provide original video content in short, five to 10 minute "chapters" formatted for smart phone displays.
With the coronavirus shutdowns forcing millions of commuters to work from home, the target market for the service all but evaporated. This lead to low viewership and meager ad revenue after initially securing deals with major advertisers like Pepsi, Walmart, and other blue-chip companies.
Coronavirus continues to disrupt global economy
While there's certainly a parallel universe where Quibi is a smashing success, in our timeline, the novel coronavirus just claimed another victim in the global economy.
With video streaming revenue completely taking over the market from the global movie box office, Quibi was well positioned to capitalize on the ever growing demand for content before the virus hit.
As a mobile-only platform and its short-form episodic content, it was tailor made to serve people on a commute who would otherwise be staring at their smartphones for some other reason.
Unfortunately, now with nearly the entire target audience for Quibi sheltering indoors amid a global pandemic in front of large computer screens and Netflix, downloads of the mobile-only service had been disappointing to say the least.
Worse, as businesses recognize the benefits of letting their employees work from home, there is a serious question about whether Quibi's audience will ever return once the pandemic ends.
Ultimately, with these kinds of headwinds, the question was never one about whether Quibi would survive, but one of how it managed to survive as long as it did.
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