Short-form media streamer Quibi is shutting down six months into its launch, the company’s founder Jeffrey Katzenberg and CEO Meg Whitman said in an open letter to employees and investors.

What Happened: Katzenberg and Whitman said they were winding down the business and returning cash to their shareholders.

Katzenberg and Whitman said “Quibi is not succeeding,” because either “the idea itself wasn’t strong enough to justify a standalone streaming service,” or “because of our timing.”

The streaming startup raised a total of $1.8 billion and counted companies like AT&T subsidiary Warner Media, Walt Disney, and Chinese billionaire Jack Ma’s Alibaba Group Holding among its investors, according to Crunchbase.

Last month, it was reported that Quibi was exploring a sale or going public through a blank-check company.

The platform, launched by Hollywood veteran Katzenberg and former eBay CEO Whitman, had signed deals with “A-listers” such as Steven Spielberg, Jennifer Lopez, and Idris Elba.

Quibi’s service was priced at $4.99 a month with ads and $7.99 a month without.

Why It Matters: The platform could only convert 8% of the users that had signed up for a 3-month free trial, according to The Verge.

In comparison, Disney+ had a conversion rate of 11% among its early subscribers, as per Sensor Tower.

Quibi had blamed the COVID-19 pandemic for its lackluster launch. A month into its debut, the company managed to garner only 3.5 million downloads and 1.3 million active users.

Rival Netflix’s third-quarter numbers indicate subscriber growth has slowed down as the streaming service added 2.2 million net paid subscribers compared to 6.8 million in the same period last year.

This story originally appeared on Benzinga.

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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