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Quibi exploring potential sale after weak debut: WSJ

Yahoo Finance's Dan Howley joins Akiko Fujita to break down the latest on Quibi, as the short-form streaming service considers a potential sale following a weak debut.

Video Transcript

AKIKO FUJITA: Struggles continue for short-form video platform Quibi. Since launching six months ago, the app has failed to meet paid subscriber targets. Now "The Wall Street Journal" reports the company is exploring a potential sale. It's also looking at raising funds through a merger with a SPAC, Special Acquisition Company.

Let's bring in Dan Howley, who has been tracking this story for us. And Dan, we should note that "The Wall Street Journal" points out, the company does have enough cash on hand to go through the end of the year. But the concern here is really, there's not a lot of prospects here for a big uptick in subscriber numbers, just given how they've performed over the last six months.

DAN HOWLEY: Yeah, I just don't think really for a company like this that it was ever destined to truly take off when there are so many other options available. I mean, look, they can pitch this, Jeffrey Katzenberg and Meg Whitman, can pitch this as being a victim of the coronavirus. But TikTok is still doing incredibly well. And those are incredibly short-form videos.

YouTube is still doing incredibly well, and there are short-form videos available on there. And Netflix numbers went through the roof. So if anything, you would expect something like Quibi, which is supposed to have these kinds of narrative-driven stories that you can get in small forms or continue to watch, you'd expect that to have done well.

But you know, according to reports, this "Wall Street Journal" report, that's not the case. Downloads haven't been anywhere near they want. Subscriber numbers haven't been anywhere near they want. And it doesn't seem that this company is destined to do anything.

I mean, look, when they first launched they said, no, we're going to stick specifically to phones. And then they made it so that you could watch it on your TV. So there really doesn't seem to be an understanding of the technology landscape-- not in terms of what they can actually do, but in terms of what consumers really want. And that just shows here with the idea that they may be looking for other strategic options.

AKIKO FUJITA: I mean, having said that, Dan, they have invested a lot of money in content. And of course, we're talking-- you know, they have not said they are in fact looking to sell the platform. But what buyer, you think, would make sense if in fact Quibi moves in that direction?

DAN HOWLEY: I mean, I think really what they would want to look for, what a buyer would look for is the content that would be available, maybe extending the shows or the movies to be full-length rather than these short little clips.

I mean, again, I can get on Netflix on a train and pause it. That's all you have to do. I don't need this to be in these little tiny chunks. I could break them up if I want and then watch them as long as I want.

So you know, it may be that people look for the content itself. They did manage to get an Emmy win for one of their shows on the platform. So it's not as though the content on there is terrible. It's just not attracting people. I don't think that a service like this really has any means to me to continue as far as the average consumer. Have you used it, Akiko?

AKIKO FUJITA: I have used it. I signed up for the trial initially. And then I did cancel it, because to your point, you're at home. You're looking at all the streaming services you already have access to. And this was, when it initially launched, just available on mobile.

DAN HOWLEY: Yeah. And I don't think that many people looked at this and said, you know, I'm stuck inside for a long time. Netflix has a ton of content, but I want something else. Give me Chrissy Teigen as a judge. I just don't think that that's something that people are really interested in.

It'll be interesting to see where they take this, though. It could perhaps turn into a blockbuster if they manage to roll it out in larger shows. But I think the format right now, it's just too kitsch at this point.

AKIKO FUJITA: Yeah, I did like LeBron's documentary, though. It's like a six-minute, several episode chunk of his school. That, I thought, was interesting.

We should point out, though, it's not just about the subscriber content or just the numbers. But also, Quibi faces a patent lawsuit that is ongoing, the core technology for their app in dispute. So we're going to continue to watch that story. Thanks so much for that, Dan.