Quibi, the short-form entertainment streaming service, is considering its options as it continues to miss subscriber targets. Now, The Wall Street Journal is reporting that the service, founded by DreamWorks vet Jeffrey Katzenberg and run by former HP exec Meg Whitman, is considering selling the venture. Other tactics to save the company from financial ruin are also on the table.
Beyond selling the company, Qiubi execs are considering raising more money to stabilize it or going public. For the latter they’d go through a merger with a special-purpose acquisition company (SPAC). According to the Journal story, the SPAC would essentially be “a blank-check company that helps fund deals.” Regardless of the path it chooses, this is not what the enthusiastic backers were hoping for. And the fact that Quibi is exploring such options is evidence of strain within the company.
The service, which launched in April, provides 5 to 10 minute original content, viewable only through a mobile phone. Initially billed as a perfect source of entertainment for people on-the-go, the service debuted instead amid coronavirus lockdowns. People weren’t going any where. While cloistered in their homes, with no shortage of streaming entertainment options, Quibi just didn’t gain the traction it had hoped for. And although Quibi requires a paid subscription after a free trial period (much like competitors Netflix and Hulu), its content is more similar in length to services like YouTube and TikTok. Both are free.
As a result, the company is now set to miss its initial paid subscriber target by a “large margin,” according to the Journal’s sources. Additionally, Quibi is facing a patent lawsuit backed by a wealthy adversary. And finally, it continues to deal with disappointed advertisers, who are unhappy with lower-than-projected viewership.
Not the End
Still, Quibi leadership sees light at the end of the tunnel. In a statement, the company said that Katzenberg and Whitman “are committed to continuing to build the business in the way that gives the greatest experience for customers, greatest value for shareholders and greatest opportunity for employees.” And there is no guarantee that Quibi will pursue any of the options listed above.
On the bright side, despite Quibi’s difficulty in building a subscriber base, the quality of its content has received high praise. Just this weekend, the Quibi original series #FreeRayshawn won two Emmy Awards. Co-stars Laurence Fishburne and Jasmine Cephas Jones each won an Emmy for their performances. Perhaps a little good press will give flight to the fledgling service.