Quibi Holdings LLC is shutting down, according to people familiar with the matter, a crash landing for a once-highflying entertainment startup that attracted some of the biggest names in Hollywood and had looked to revolutionize how people consume entertainment.
The streaming service, which served up shows in 5- to 10-minute “chapters” formatted to fit a smartphone screen, has been plagued with problems since its April launch, facing lower-than-expected viewership and a lawsuit from a well-capitalized foe.
On Wednesday, founder Jeffrey Katzenberg called Quibi investors to tell them he is shutting the service down, some of the people said.
Mr. Katzenberg and Chief Executive Meg Whitman decided to shut down the company in an effort to return as much capital to investors as possible instead of trying to prolong the life of the company and risk losing more money, according to the people familiar with the matter.
Employees will be laid off and will be paid a severance, the people said, and the company will explore selling the rights to some of its content to other media and technology firms.
The decision marks a disappointing turn of events for Mr. Katzenberg, a former Walt Disney Co. executive and DreamWorks co-founder who pitched the streaming service as a revolutionary new entrant to the video-streaming wars.
Quibi was designed for people who consume entertainment in short increments on their smartphones, but the coronavirus pandemic forced would-be subscribers away from the kinds of on-the-go situations Quibi executives envisioned for its users. Quibi eventually allowed subscribers to watch its shows on their TVs.
Wall Street Journal