The streaming startup founded by Jeffrey Katzenberg and headed by CEO Meg Whitman, is shutting down after a very short-lived run, potentially calling into question big-ticket brand sponsorships of unproven streaming platforms.
Quibi, short for “quick bites,” was the darling of the entertainment world, raising $1.75 billion to produce programming starring top Hollywood talent, and it secured $150 million in ad commitments from about 10 Blue Chip sponsors ahead of its highly anticipated debut.
But once the platform launched in April – right in the middle of the pandemic – its entire business proposition was upended. The idea of serving up shows less than 10-minutes in length, designed specifically for mobile and to be consumed during short breaks when people are outside their homes, such as during commutes, seemed pointless when people had nowhere to go.
Many of Quibi’s advertisers – which included Progressive, T-Mobile, Google, Taco Bell, Anheuser-Busch InBev, Walmart, General Mills, Procter and Gamble and PepsiCo – have been reluctant to publicly criticise the service. But deals with Quibi, which were slated to run through April 2021, had been under pressure since its debut, with some sponsors complaining behind the scenes that the platform did not meet viewership goals.
“They haven’t delivered on the first round of advertising,” one of Quibi’s launch sponsors told Ad Age in September. “It wasn’t worth the money we paid them.” As of September, Quibi was still negotiating with advertisers about how it could meet ad campaign expectations.