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At American Film Market last year, everyone was abuzz about Quibi before it launched. They appeared to have checked all the boxes. When they launched, my wife (

At American Film Market last year, everyone was abuzz about Quibi before it launched. They appeared to have checked all the boxes. When they launched, my wife (who also attended AFM and is also in the film space) became a user, and I experienced it vicariously. A few thoughts on why this failed, and then simply shut down instead of being acquired. 1) Their hypothesis that short form content was desirable was deeply flawed, and I think based on an assumption that online attention spans are short. This is not true with film and TV where the trend has gone over to binge watching very long form content e.g. Vikings, House of Cards, etc. 2) There was no way to watch their content on a big screen. So that introduced another assumption - that no large market segment would want to consume their content on a bigger screen. We actually tried to watch it on Amazon Fire and the hack is horrible. 3) They decided they wanted to attract a number of A list directors and other talent and blew not only a lot of budget on that, but they also wrote their terms so that after two years they lose exclusivity and after 7 years the content reverts back to the creator. This is insane, if you consider the investment and long term value around the films and series that Prime, Netflix and Disney create. The direct effect of this was that there was no business to sell when they decided to shop the company. 4) Quibi suspended releasing new content during the recent protests, while continuing to burn investment cash. They should have adapted to the times. Even post 9/11 certain films were put on hold, but those were films insensitive to current events. I can't imagine all their content fell into that category. They still have $850 million in cash and have decided to call it. Sounds like Whitman and Katzenberg actually have a good shot at recouping some of their $10.5 and $5.5MM investment respectively. Which leads me to wonder whether they had that money to burn in the first place. Doesn't exactly feel like a "failure isn't an option" approach - and with that cash still in the bank they could take all their learnings from the initial launch and do a hard pivot. Although the business model may be so fundamentally flawed, for the reasons I've described above, that a pivot isn't even feasible.

TheCondor 6y ago
Anyone here ever call it and offer to give back 50% of the money to the investors? The one time I've seen it done, it was taken as "heroic" and that exact same board approved a dramatic pivot which in turn watched that money and 3 more rounds be consumed by. "That CEO is a straight shooter to make a hard call that quickly... give him some more money..." All things being equal, I wonder what the content is really worth, that stuff typically doesn't age well so not maintaining the ownership may not have been a bad thing and it sounds like they recognized that it wasn't going to catch fire and so shutting it down makes sense. I expect the investment community will look upon it favorably. It's easy to criticize and I don't think I'd have ever paid $10 a month for it, but we also live in a world where there is TV streaming to gas pumps. I wonder what people will do when gas stations stop selling gas but it still takes 20minutes to fully charge your electric car...
- tyre 6y ago
  I know multiple companies that have "called it" and returned money to shareholders. Sometimes outright, others via acquihires when the company has a fair bit of runway. It's a combination of respect to investors, the drain of working on something that isn't going anywhere, and starting a fresh company (and cap table) if you have something you want to do instead.
- tacon 6y ago
  >Anyone here ever call it and offer to give back 50% of the money to the investors? Yes, the startup that became Twitter.
hn_throwaway_99 6y ago
> and with that cash still in the bank they could take all their learnings from the initial launch and do a hard pivot. Honestly, thank god they didn't. Sure, I think pivots sometimes make sense, but I think they realized at this point that all the money they put in was sunk cost, and they're really nowhere closer to when they started, and in fact it's probably easier to start anew if they even wanted to with a lower cost base. Better to call it quits and save their dough.
deleted 6y ago
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Digory 6y ago
> after two years... I wonder why they didn’t just try to monetize what they have, while they have it, on YouTube. That would at least tell you if the content was better than the platform. But, it sounds like they gave creators extraordinary control.

TheCondor 6y ago

Anyone here ever call it and offer to give back 50% of the money to the investors? The one time I've seen it done, it was taken as "heroic" and that exact same board approved a dramatic pivot which in turn watched that money and 3 more rounds be consumed by. "That CEO is a straight shooter to make a hard call that quickly... give him some more money..." All things being equal, I wonder what the content is really worth, that stuff typically doesn't age well so not maintaining the ownership may not have been a bad thing and it sounds like they recognized that it wasn't going to catch fire and so shutting it down makes sense. I expect the investment community will look upon it favorably. It's easy to criticize and I don't think I'd have ever paid $10 a month for it, but we also live in a world where there is TV streaming to gas pumps. I wonder what people will do when gas stations stop selling gas but it still takes 20minutes to fully charge your electric car...

tyre 6y ago
I know multiple companies that have "called it" and returned money to shareholders. Sometimes outright, others via acquihires when the company has a fair bit of runway. It's a combination of respect to investors, the drain of working on something that isn't going anywhere, and starting a fresh company (and cap table) if you have something you want to do instead.
tacon 6y ago
>Anyone here ever call it and offer to give back 50% of the money to the investors? Yes, the startup that became Twitter.

hn_throwaway_99 6y ago

> and with that cash still in the bank they could take all their learnings from the initial launch and do a hard pivot. Honestly, thank god they didn't. Sure, I think pivots sometimes make sense, but I think they realized at this point that all the money they put in was sunk cost, and they're really nowhere closer to when they started, and in fact it's probably easier to start anew if they even wanted to with a lower cost base. Better to call it quits and save their dough.

deleted 6y ago

[deleted]

Digory 6y ago

> after two years... I wonder why they didn’t just try to monetize what they have, while they have it, on YouTube. That would at least tell you if the content was better than the platform. But, it sounds like they gave creators extraordinary control.