Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

Quibi, the mobile-only video subscription streaming service, is shutting down, the company announced Wednesday. The company said the decision was made to preserve shareholder equity.

Why it matters: Quibi had struggled to hit its subscriber growth targets amid the global pandemic. The app launched six months ago.

Details: Quibi said in a statement that it intended to wind down its business operations and initiate a process to sell its assets over the next few months.

  • "Following the Company’s wind down and satisfaction of all liabilities, the remaining funds will be returned to its investors as specified in the Company’s operating agreement," the statement said.
  • The company noted that its board made the decision to shutter after exploring several strategic and financial options. (Reports previously suggested that the company was considering a full sale but failed to find a buyer.)
  • Quibi says app subscribers will receive separate notifications regarding the final date of access to the platform.

The company blamed its woes on changes to the industry landscape and ongoing challenges. "[I]t was clear that the business would not be able to continue operating for the long-term on a standalone basis," the statement said.

By the numbers: The company raised a whopping $1.75 billion to get the app off the ground from Alibaba, as well as Hollywood behemoths like Walt Disney Company, NBCUniversal and AT&T's WarnerMedia.

  • CEO Meg Whitman said in the statement that while the company had enough capital to continue operating for a significant period of time, "we made the difficult decision to wind down the business, return cash to our shareholders, and say goodbye to our talented colleagues with grace.”

Earlier on Wednesday, The Wall Street Journal reported that Katzenberg would be informing the board of the move.

  • The company hired a restructuring firm to evaluate its options in recent weeks, per WSJ. One of the recommendations was to close operations.
  • The Information reported on Tuesday that strategy meetings have recently been canceled.

The big picture: The app, which launched in April, struggled to attract subscribers amid a streaming boom during the COVID-19 pandemic.

  • Third-party analytics companies reported over the summer that the app only attracted a few million downloads. The company never officially confirmed any paid subscriber numbers, but Katzenberg told the New York Times in May that it saw 3.5 million downloads. Other analytics companies reported that Quibi struggled to convert most of its free trial subscribers to paid subscribers.
  • It also faced a heated patent lawsuit funded by a powerful activist investor over what it considered its flagship technology.
  • Quibi was created to provide short-form videos to young users via mobile. Most videos were 7–10 minutes in length, but shot both vertically and horizontally. In recent months, the company had been experimenting with putting some of that programming on TV screens.

Between the lines: The company's business model was contingent on having enough subscribers and eyeballs on its content to sell lucrative ads — a similar model to the video subscription streaming service Hulu.

  • Axios reported in March that the company sold out its first year in ads — $150 million in revenue — ahead of its April 6 launch. That number was fixed via pre-sold ad agreements with 10 companies.
  • Ad partners included big-name marketers like Progressive, Discover, General Mills, Procter & Gamble, AB InBev, Taco Bell, Pepsi, T-Mobile, Google and Walmart.
  • Prior to the service launching, Quibi CEO Meg Whitman told Axios in an interview that she expected the majority of subscribers to choose Quibi's ad-supported plan.

Our thought bubble: Quibi argued that months of stay-at-home lockdowns pushed consumers to TV streaming services and away from mobile-only video. But TikTok, a Chinese-owned short-form video app that's mobile-only, has gained massive traction in that same time, even while facing major regulatory headwinds.

  • Quibi's problem was that it raised a lot of money and couldn't live up to the hype. Its programming never produced any smash hits. And consumers never really embraced its "turnstyle" format, which it billed as revolutionary.

What's next: Whitman says the company will work to find a buyer for its assets in the next few months. “We continue to believe that there is an attractive market for premium, short-form content," she said.

Jeffrey Katzenberg is an investor in Axios.

Go deeper

Dec 1, 2020 - Technology

Facebook, Google push deals despite antitrust scrutiny

Illustration: Eniola Odetunde/Axios

Facebook announced Monday that it has purchased a customer service chatbot startup called Kustomer. The app reportedly cost Facebook $1 billion, the same amount it paid for Instagram in 2012.

Why it matters: The deal is the latest sign that the world's biggest tech companies, despite facing enormous antitrust scrutiny globally, will not stop buying up other companies.
.

24 mins ago - Health

U.S. exceeds 100,000 COVID-related hospitalizations for the first time

People wait outside the Emergency room of the Garfield Medical Center in Monterey Park, California on Dec 1. Photo: Frederic J. Brown/Getty Images

More than 100,200 Americans were hospitalized as of Wednesday due to the coronavirus for the first time since the outbreak began in early 2020, per the COVID Tracking Project.

The big picture: The milestone comes as health officials anticipated cases to surge due to holiday travel and gatherings. The impact of the holiday remains notable, as many states across the country are only reporting partial data.

4 hours ago - Science

The "war on nature"

A resident stands on his roof as the Blue Ridge Fire burned back in October in Chino Hills, Calif. Photo: Jae C. Hong/AP

Apocalyptic weather is the new normal because humans are "waging war on nature," the UN declared on Wednesday.

What they're saying: "The state of the planet is broken," said UN Secretary-General António Guterres, reports AP. “This is suicidal.”