Six months after its debut, Quibi co-founders Jeffrey Katzenberg and Meg Whitman made the unexpected announcement of its closure. Many Hollywood observers had long speculated as to whether Quibi's ambitious startup could change mobile viewing habits significantly, yet many expected an impactful impactful impact given its notable executives and investors. 1. Lack of Content Quibi co-founders believe it was the right decision to close down their service, returning any remaining cash back to investors while paying employees their severance packages. Their announcement came amid reports that Quibi could fall short of its projected first-year subscriber goal with only under two million paying subscribers according to The Wall Street Journal. Quibi first launched in April and was tailored exclusively for viewing on mobile devices such as smartphones and tablets. Its content was organized into five-to-10 minute segments designed to appeal to viewers on the move - whether standing in line at Starbucks, riding mass transit, or living a fast-paced life. However, the app failed to attract enough users, even with a free 90-day trial available. Research firm Sensor Tower reported that less than 10% of those who downloaded it converted into paying customers; as numbers disappointed blue chip marketers who provided credibility to startup demanded changes to their deal terms - and no breakthrough hit appeared to boost engagement levels and generate meaningful growth. Further hindering its reputation was that the app didn't offer a way for viewers to share clips from shows or generate word-of-mouth buzz, plus other setbacks that damaged its brand like the inability to screencap videos - something common with competing services. Quibi was doomed from its inception due to an ill-considered technology that allowed users to switch in real time between horizontal and vertical viewing modes; eventually this feature was challenged in court for patent infringement. Though Katzenberg claimed "everything that has gone wrong with Quibi is due to coronavirus", it was evident from day one that Quibi would fail. 2. Lack of Relevance Quibi was in trouble before COVID-19 even hit, but many online articles point to this pandemic as the source of its downfall. While people had to stay home during its spread, Quibi faced other difficulties that made its existence untenable: it had difficulty promoting its content and was unable to attract users despite repeated efforts at promotion; even if those efforts had succeeded in drawing customers in, chances are it wouldn't have made much of an impact in streaming markets overall. At the core of any successful company lies its understanding of its audience. That's why 34% of startups fail due to a lack of product-market fit; unfortunately for Katzenberg and Whitman they failed in this regard: their focus was more on how their technology would disrupt media industry than on what kind of content would most resonate with consumers; leading to marketing missteps such as placing expensive ads during Oscars and Super Bowl shows, both known to draw older viewers - leading 70% of survey participants to mistake Quibi as food delivery service! Quibi placed too much emphasis on attracting celebrities and big-name talent rather than on creating original content that appealed to young audiences, leading it to fail at creating shows that attracted them compared to TikTok and YouTube which offer free videos. As a result, Quibi found it hard to compete against TikTok and YouTube which offered their videos free of charge. Quibi's failure was certainly disappointing for investors and industry alike, yet this doesn't imply other startups won't find success in streaming space. Indeed, new ideas and services must continue to enter this sector for growth to take place; therefore, Hollywood players need to support new companies so that they may continue thriving. 3. Poor Marketing At a time when many media and tech companies are struggling, the attention being lavished upon the demise of Quibi is almost comical. Yet investors and industry experts alike are keeping a close eye on this company that's showing just how far things can go wrong when launching new technology services. Sources tell Deadline that at the very end of Quibi's existence, co-founders Whitman and Katzenberg informed employees via video call that it would soon close down. Although raising more capital or selling off the business might have been possible, it became apparent they no longer believed in its prospects. Before even creating the first episode, the team recruited A-list talent from movies and television to produce five- to ten-minute shows exclusively for mobile app. While entertaining, however, this content wasn't enough to attract subscribers. Covid-19's pandemic was an unfortunate turning point that hastened its decline, yet alone is not responsible for its downfall. Pricing issues also played a large part in its downfall; charging $5 a month for entertainment that people could get for free elsewhere (TikTok and YouTube for instance) along with shows they already pay for on Netflix and Hulu was unjustifiable. Quibi's apps were not as robust as competing services; viewers found it hard to locate and discover shows they wanted to watch, making the design imperfect as users could only watch one show at a time instead of simultaneously with other content; this was particularly inconvenient for on-the-go audiences that Quibi was intended for; who had to choose between watching their shows or communicating with friends. 4. Poor Business Model Quibi's shutdown is being seen by many as an iconic example of tech industry maxim "Fail fast and learn." Additionally, its shuttering has raised questions over how much cash could have been invested into an uncertain venture. Katzenberg and Whitman raised $1 billion from major film studios, telecom companies, TV networks, banks, technology investors and technology VCs to develop an app to rival Netflix, HBO or any of the established streaming services like Spotify or Pandora. The company believed millennial audiences would clamor for premium content created for mobile phones that offered 10-minute episodes, charging $4.99 monthly with ads or $7.99 to access an ad-free service. Quibi was counting on commutes, coffee shop lines and shopping trips as an engine of audience growth; however, due to pandemic concerns audiences opted for free content from YouTube and social media rather than paying for newcomers such as Quibi. The pandemic further reduced these activities, inhibiting audience growth potential for Quibi. Katzenberg and Whitman ultimately decided that their $2 billion investment had been unsuccessful, opting to shutter the company rather than raising more capital or selling to new owners. Notifying employees through a virtual meeting, they returned all funds back to investors as an honorable move. Insiders say it must be hard for all those young Hollywood workers who took jobs at Quibi with hopes of creating the next big entertainment startup, but it was always flawed from its foundation up. Quibi had flawed assumptions and its content wasn't worth watching. 5. Lack of Support Quibi attracted considerable investments but ultimately ran into trouble as its startup burned nearly $2B during its lifetime, forcing most of it back to investors as returns. Quibi was struggling, however, without industry support to match its wealth. Most major studios weren't interested in contributing content to Quibi; even if they had, they likely needed assurances that this platform would succeed before committing any funds. Katzenberg and Whitman also committed a number of errors that contributed to the company's demise, such as misinterpreting themselves as an old-fashioned media company when they should have seen themselves more as an innovative tech firm that changed how people consumed content. Furthermore, they misread their audience and were out of step with those they targeted - this became evident early on with inappropriate names like NewTV and Omaskase (based off Nobu Malibu's tasting menu) along with outdated business models that failed to capture modern audiences. Quibi was also unable to take advantage of the Covid-19 pandemic, which took away valuable opportunities for growth during times when there was less demand for their service. All these issues contributed to making Quibi unsustainable; ultimately leading them to shutter it altogether and return any funds left by investors back to investors while leaving many employees scrambling for work elsewhere.