LOS ANGELES (CelebrityAccess) — Quibi Holdings LLC, the company behind the much-touted Quibi streaming video service, is reportedly shutting down after just 6 months.
According to the Wall Street Journal, Quibi founder Jeffrey Katzenberg contacted Quibi investors on Wednesday to tell them the service will be coming to an end.
People familiar with the decision told the Wall Street Journal that Katzenberg and Chief Executive Meg Whitman, said they are pulling the plug on Quibi in order to return as much capital as possible to investors.
Employees will be laid off and will be paid a severance, and Quibi will look at selling some of its established intellectual property in the coming weeks, sources told the WSJ.
Quibi, which launched in April, attempted to find a niche for itself with video content that was designed to be viewed on mobile devices. Unlike other services such as Netflix, which has generally followed the conventions such as half-hour and hour-long episodes, originally developed for network television, Quibi sought to change the dynamic by offering much shorter, easily digestible content with episodic programming delivered in 10-minute chunks.
While the platform’s launch seemed perfectly timed to capitalize on a captive, quarantined audience, it pulled potential viewers away from morning commutes and workplace environments that Quibi was designed to appeal to.
Quibi’s omnipresent advertising campaigns and a shift to freemium in some markets in August, combined with a price reduction for the ad-free version failed to attract fans to the platform.
According to the Wall Street Journal, Quibi hired AlixPartners LLP, a restructuring specialist in recent weeks to oversee changes at the platform.
Quibi is also fighting litigation from interactive-video company Eko, who alleged that Quibi violated patents and stole trade secrets, particularly in providing different videos to viewers based on the orientation of their mobile device screens, the WSJ reported.
“Our goal when we launched Quibi was to create a new category of short-form entertainment for mobile devices. Although the circumstances were not right for Quibi to succeed as a standalone company, our team achieved much of what we set out to accomplish, and we are tremendously proud of the award-winning and innovative work that we have produced, both in terms of original content and the underlying technology platform. Over the coming months we will be working hard to find buyers for these valuable assets who can leverage them to their full potential,” Katzenberg and Whitman said in a statement published by Medium.