The sun sets on Quibi, the first major victim of subscription fatigue - The UpStream

The sun sets on Quibi, the first major victim of subscription fatigue

posted Sunday Oct 25, 2020 by Scott Ertz

The sun sets on Quibi, the first major victim of subscription fatigue

The mobile-focused streaming service Quibi has been in trouble since before its launch. This week, that trouble has turned to disaster, as the company has announced it is shutting down around December 1, 2020 and looking for a buyer for the corporate assets. The executives did everything in their power to raise the value and recognition of the brand months before it was made available. They signed an agreement with T-Mobile, which brought the service to T-Mobile Tuesdays offering 6 months for free. They also signed big-name content, such as Reno 911!.

However, the problem the company faced was a lot of competition and a difficult value proposition. The short-form content concept was going to be a difficult sell under normal circumstances, but 2020 did not make it better. While under 10-minute episodes would have been good while waiting in line, walking on a treadmill at the gym, or sitting at a diner, none of those things have been common this year because of the lockdowns. Quibi founder Jeffrey Katzenberg and CEO Meg Whitman said in a joint statement,

Quibi is not succeeding. Likely for one of two reasons: because the idea itself wasn't strong enough to justify a standalone streaming service or because of our timing. Unfortunately, we will never know but we suspect it's been a combination of the two.

The company began to recognize that the business model wasn't working, and experimented with a free tier, similar to the Peacock service. Unfortunately, the experiment was only run in Australia and New Zealand, so it was not enough of a test to see if it would work. Because of the limited content available, it was difficult to convince people that $5 per month was worth the investment. A free, ad-supported tier with a portion of the content may have attracted users to the platform in the same way that it has worked for Comcast.

In addition to issues with the value proposition, the company has also been sued over patent infringement with its shifting view for landscape and portrait mode. This lawsuit has hurt investment which may have been able to keep the lights on longer.

The future of the content that was produced is unclear. The agreements with creators were very creator-friendly. The company paid to produce the content, and then licensed the content under 2 year exclusivity deals. With the shutdown of the company, it's not clear if the exclusivity would expire. If it does, the creators could shop the content to other services. If it does not, Quibi might be able to sell the license to other services. Either way, it is going to be on a one-off basis.


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