Quibi, a short-form streaming service, launched in April 2020, offering original content designed for watching on mobile devices. The name “Quibi” was short for “quick bites,” reflecting the platform’s focus on delivering short videos that were no longer than 10 minutes. (Quibi rhymes with Libby for pronunciation purposes.) Meg Whitman, former CEO of Hewlett Packard and eBay, and Jeffrey Katzenberg, former CEO of Disney and cofounder of Dreamworks, are Quibi’s cofounders. The concept for Quibi was to fill a gap in the market for mobile-focused, bite-sized content that people could watch on the go. For \($4.99\) with ads and \($7.99\) without ads per month, you got access to a library of videos made specifically for watching on mobile devices. The content included a mix of dramatic series, news shows, recaps called daily essentials, as well as reality shows and other formats. Quibi’s main selling points were that people could watch the content in both landscape and portrait mode and that the episodes were short enough (from 5 to 15 minutes) to be watched on the go—for example, when riding on a bus, commuting on a train, or waiting for a class to start. Quibi also pledged to produce Hollywood-quality content, as opposed to user-generated content found on TikTok and YouTube, divided into 10-minute segments. Quibi raised \($1.75\) billion in funding. Its backers included major companies such as Disney, Time Warner, Sony Pictures, JPMorgan Chase, and Alibaba. Despite its advantages, Quibi struggled to gain traction and build a large subscriber base. It failed in December 2020, just six months after its launch. So, what went wrong? Several thoughtful articles describe Quibi’s failure. The consensus is that there are four reasons for the firm’s failure.

Reason #1—COVID-19. 

The launch point for Quibi was indeed challenging. People on the go (riding trains, standing in line at Starbucks, waiting for a ball game to start, and so forth) are those Quibi intended to serve. But the number of people fitting this description declined substantially in March 2020. Some people are skeptical of the pandemic as an explanation for Quibi’s failure. TikTok’s usage grew during the pandemic and, like Quibi, it relies on short-term content. Also, did people really stop looking at their phones when things shut down? You be the judge.

Reason #2—Quality of Content.

 Quibi tried to build a large library of content quickly. The firm wanted to launch with 50 original shows and add 125 shows before the end of 2020. The consensus is that it was too much too fast and that quality suffered. Things started going poorly for Quibi soon after its launch. The Quibi app’s ranking dropped to number 284 by mid-June. It did not have a hit series or show. Critics were brutal, focusing mostly on Quibi’s flops. In an article appearing in The Guardian during the pandemic, the author said, “The majority of its lineup consists of shows we don’t need right now on a platform we don’t really want. It’s an idea born in an LA conference room that will probably die in the real world, content for content’s sake, teasing something bigger and better that doesn’t seem to come. We might have more time than ever right now but there still isn’t enough time for Quibi.”

Reason #3—Marketing. 

According to Failory, a website that follows startup failures, Quibi’s marketing efforts focused on the platform and its usefulness, rather than on the content. Failory wrote, “It seems that Quibi entirely missed the point that people subscribe to their streaming services because of the content, rather than the service itself.” Also, Quibi’s ads seemed misplaced. For example, Quibi ran a commercial during the 2020 Oscars. Millennials were Quibi’s target customer, yet the average Oscars’ viewer is in their mid-50s.

Reason #4—Failure to Leverage Social Media.

 Quibi, for a long time, did not allow users to easily take clips and screenshots of Quibi’s shows to share on social media. The firm did not understand that millennials, in particular, like to share what they are watching by posting clips on their own social media accounts. Such sharing accounts for clips going viral and how other people learn about a service. Quibi also found itself competing directly against social media—TikTok and YouTube in particular. The fact that there is no charge for their service is a significant advantage for TikTok and YouTube; in contrast, Quibi offered a paid service. Also, not all content on YouTube is user generated or amateurish. There are millions of music videos, movie clips, and other high-quality entertainment on YouTube that is free and easy to find. In summary, Quibi’s failure demonstrates the famous Paul Graham quote of “make something people want.” That quote is now the motto of Y-Combinator, one of the most respected business accelerators in the United States. It seems that Quibi did not “make something people want,” which is a fundamental aspect of successful entrepreneurship.....

Discussion Questions:

1. Do you think Quibi had a sound business plan? If not, make a list of three actions that, if pursued, might have led to a more positive outcome for the company.
2. Do a Google search to find reasons for Quibi’s failure.
List at least one reason that contributed to Quibi’s failure that we did not mention in the feature.

3. What can a startup that plans to launch a streaming service that competes against Netflix in the category of paid services and TikTok and YouTube in the category of unpaid services learn from Quibi’s failure?
4. We discuss four reasons for Quibi’s failure. In your view, which reason do you think was the most damaging, and why?