Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Dan Roberts discuss how Quibi ended up shutting down.
ALEXIS CHRISTOFOROUS: It's the end of what was a very short road for Quibi. The short-form mobile video app shutting down barely six months after going live and raising nearly $2 billion in venture funding. Dan Roberts is here now for more on this. So, Dan, I mean, what happened? You had big names and big money behind this thing. Jeffrey Katzenberg was heading it up. What went wrong for Quibi?
DAN ROBERTS: Yeah, what went wrong, Alexis? I mean, what didn't go wrong. Now, if you ask Katzenberg and Whitman, it was the pandemic. And there was a sort of instantly viral infamous interview he gave to "The Times," just over a month after Quibi launched in May where he said, I blame every single problem we've had on coronavirus.
But the problem with that thinking is it assumes that without the pandemic, this would have been a big hit. I'm not sure there's any evidence of that. The premise, of course, was short form television on your phone. And, in fact, it's important to mention that Quibi launched, at first, only viewable on your phone. So here everyone was at home, staying at home watching content on their TVs, and there wasn't even a way to watch Quibi shows on your television. It took a few months for Quibi to finally add that option.
So the premise, previously, before the pandemic, was it's on-the-go, you would watch when you have a quick moment. Maybe you're waiting for the subway on the platform and you still have service, maybe you're on the bus, maybe you're at a bar waiting for your friends to arrive, but I'm just not sure, and maybe we'll never know, that people were clamoring for that kind of thing.
I mean, there's very short, there's two or three-minute videos, and then there's watching an hour-long "Tiger King" episode. These were 10-minute episodes of shows, or in some cases, movies split up into 10-minute chapters. And Katzenberg and Whitman talked that up in their media blitz before it launched and said, this is the future. I'm not sure if it was. Of course, consequently, it's possible that the shows just weren't good.
But either way, they didn't reach many subscribers. It was clear right away it wasn't working out. And they blame the pandemic. I think it didn't help launching during the pandemic. But they can't just blame that. And according to SensorTower data, they only converted something like 8% of the 90-day free trial people to paid subscriptions. In the end, they only got about 70,000 paid subscribers. Drop in the bucket.
BRIAN SOZZI: Dan, the days of Katzenberg and Whitman raising money, are those days over? This is one of the worst flops I've ever seen inside of corporate America. Now the stars that created this content, they got paid. These two executives got paid. But you have a lot of investors out a lot of money.
DAN ROBERTS: Yeah, I think that's a fair question. But look at Steve Case. I mean the AOL-Time Warner merger that was sort of infamous, and people point to as one of the big massive merger failures. Well, he's still out there doing things. VC money. People bounce back. And I'm sure they have their connections. And I'm sure that these two executives also a lot of people in their inner circle who are telling them so unfair. The press was unfair. The pandemic happened. You couldn't have foreseen that. It was a great idea. You just got screwed by unlucky, unforeseen circumstances.
But you're right, Brian, it's a major flop. Amid the streaming wars, there was a time there where it seemed like anything would succeed. Everyone was launching a new streaming app, and they all were working. Peacock, HBO Max, Disney+ is a hit, ESPN plus, Hulu. Well, they weren't all hits. I mean, it's a reminder that there is such a thing as too many streaming apps. People just weren't clamoring for something like this. Of course, as they say in their goodbye letter, we'll never know whether it would've been a hit without the pandemic.