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Quibi 本来要革好莱坞的命却以失败告终,Quibi失败的原因总结

Quibi 本来要革好莱坞的命却以失败告终,Quibi失败的原因总结

By Benjamin Mullin and Lillian RizzoNov. 2, 2020 2:04 pm ET WSJ

When Jeffrey Katzenberg and Meg Whitman were developing plans for a new streaming-video service called Quibi, they got a warning from advisers. Make sure it can be seen on TVs, not just phones.

The two executives didn’t follow the recommendation, according to people familiar with the matter, and designed the service exclusively for people on the go. The company eventually changed course after launching, and in October, it released TV apps for some of the biggest streaming-media platforms. 

It was too late: Within days, Quibi announced it was shutting down.

Quibi, short for “quick bites,” one of Hollywood’s most ambitious startups, aimed to revolutionize entertainment with short-form content designed specifically for mobile phones. Investors who poured $1.75 billion into this idea did so largely because they trusted the gut instincts and vision of Mr. Katzenberg, the movie mogul who founded Quibi, and Ms. Whitman, the former CEO of Hewlett Packard and eBay, whom he recruited as chief executive.

Instead, they witnessed one of the fastest collapses in the entertainment business. According to interviews with current and former employees, investors, advisers and production partners, Quibi failed because the duo’s famed instincts proved wrong.

Mr. Katzenberg and Ms. Whitman misjudged which programming and technology features would appeal to young consumers, the people said. They bet, incorrectly, that the service would ride a wave of stay-at-home streaming after launching at the peak of the coronavirus pandemic. And Mr. Katzenberg’s spending on advertising left little financial wiggle room when the company was struggling.

Quibi offered shows that could be watched on the go. PHOTO: ANDREW HARRER/BLOOMBERG NEWS


In a written statement, Mr. Katzenberg and Ms. Whitman said, “Quibi was a big idea and there was no one who wanted to make a success of it more than we did. We exhausted all options and came to the difficult decision to wind down the business.” They said they were proud of the work Quibi produced. 


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“We offer a profound apology to our employees, investors and partners who believed in Quibi and made the business possible,” they said. 

Quibi’s failure suggests there are limits to the consumer appetite for new streaming options. To compete, new players can’t afford to have a flawed idea or shaky execution, especially when their rivals— Netflix Inc. to NBCUniversal’s Peacock to Walt Disney Co. ’s Disney+—have brand recognition and deep libraries of programming.

During a presentation to Quibi investors on Oct. 21, Mr. Katzenberg called the company’s failure a “crushing disappointment,” according to a person familiar with the call. Quibi finished with 450,000 paid subscribers, nowhere near the 7.4 million it was targeting in the first year, according to people familiar with its finances. Not enough people were willing to pay the $4.99-per-month fee when their free trials ended.

Quibi anticipates it will have spent more than $1 billion of the money it raised through the beginning of 2021, and projected it would have at least $750 million in cash on hand at the end of October, the people said. Roughly $350 million will go back to Quibi’s earliest investors, including Disney, Comcast Corp.’s NBCUniversal and Sony Corp. , as well as Ms. Whitman and WndrCo, Mr. Katzenberg’s holding company. 

The company considered alternatives to liquidation, including a shift to a “freemium” model, where most content would be free except for certain premium features. Top executives ran the numbers. They found that sustaining that approach would require about $2.4 billion of capital by 2024, including about $400 million next year, people close to the situation said. Quibi also explored a sale or partnership with another media company.

Meg Whitman and Jeffrey Katzenberg at a Los Angeles Lakers game in February. PHOTO: HARRY HOW/GETTY IMAGES

In a public letter Oct. 21, the day Quibi announced its shutdown, Mr. Katzenberg and Ms. Whitman said the company likely failed because its idea wasn’t strong enough and the timing wasn’t good.

A spokeswoman said Quibi had sound financial planning and programming that got good reviews from critics, and said technology features such as the TV apps were always on the road map—just not the first priority at the launch. 

Quick Collapse

Quibi announced its shutdown in October, about six months after its app went live.

Jan. 24, 2018: Quibi–then called NewTV–

announces that Meg Whitman will join as CEO.

Aug. 7: NewTV announces it has closed a 

$1 billion funding round with participation 

from major Hollywood studios.

Oct. 10: Ms. Whitman and Mr. Katzenberg announce NewTV will be called Quibi onstage during an event held by Vanity Fair.

Nov. 12, 2019: Walt Disney Co. launches Disney+.

March 3, 2020: Quibi closes a second round of financing worth $750 million.


April 6: Quibi launches its app.

May 27: AT&T Inc.’s WarnerMedia launches HBO Max.

July 15: Peacock, NBCUniversal’s streaming service, launches nationally.

Oct. 21: Quibi says it is shutting down.`

After closing a $1 billion funding round in 2018, Mr. Katzenberg and Ms. Whitman went on a hiring spree to bring in top technology and media talent, recruiting employees from Netflix, Hulu and Snap Inc. They pitched the service as a revolutionary fusion of Silicon Valley and Hollywood that would ride the rising tide of mobile viewing.

From the start, executives and advisers debated whether Quibi was setting itself up properly. In addition to recommending that Quibi should be made available on TVs, outside advisers and some Quibi employees also recommended, to no avail, that the service allow social-sharing features similar to Alphabet Inc.’s YouTube at launch. TikTok, a service that lets users share short home videos, has boomed.

Intellectual-property protections in professional Hollywood content make sharing difficult. Quibi eventually created a feature that allowed users to share stills from its shows.

Quibi focused its energies, and much of its money, on lining up a string of big content deals. Liam Hemsworth agreed to make “Most Dangerous Game,” a show about human-hunting, while Anna Kendrick starred in “Dummy,” a show about a living sex doll. null

Liam Hemsworth, left, in an episode of ‘Most Dangerous Game.’PHOTO: QUIBI/EVERETT COLLECTION

In March, the reality of the coronavirus pandemic began to set in. CBS and Quibi held a dinner at a Mediterranean restaurant in New York to celebrate the launch of “60 in 6,” a Quibi newscast developed with CBS meant to help “60 Minutes” reach younger audiences. Several CBS staffers contracted Covid-19, and health officials informed them they were among the first batch of known cases in the city. CBS News declined to comment.

Mr. Katzenberg and Ms. Whitman decided to push ahead with a launch in April, despite the pandemic, partly because the company had already committed to advertising campaigns and had high fixed costs on content and staff, people close to the company say. 

By the end of the second quarter, Quibi expected its cumulative spending on content, marketing and salaries to cross $930 million, documents reviewed by The Wall Street Journal show.

Other streaming companies, including Netflix, Amazon.com Inc.’s Prime Video and Disney+, saw a surge in usage when the pandemic began and people found themselves stuck at home.

Mr. Katzenberg hoped Quibi would get a similar lift, people close to the company said. It didn’t. Downloads of the app were anemic after the April launch and the subscriber count was paltry. Mr. Katzenberg struck an optimistic note internally, so many employees were surprised and disappointed when he gave an interview in May to the New York Times saying that the launch had problems.Declining DownloadsDownloads of Quibi spiked after the app waslaunched but quickly fell off.Daily downloads of Quibi’s appSource: Sensor Tower.installsApril 7MayJuneJulyAug.Sept.Oct.0100,000200,000300,000400,000

Mr. Katzenberg tried to answer employees’ concerns at an all-hands meeting in May, attendees said. He said he was confident life would return to normal and people would be back standing in line at the dry cleaners, where they could watch Quibi—the sort of line some employees viewed as out-of-touch, the attendees said. He also mentioned that his company, WndrCo LLC, nearly invested in the company that became TikTok but passed, a statement that puzzled some staffers, who wondered why he would volunteer the fact that he missed out on a great deal, one of them said. null

In a company presentation, executives promoted a strategy they called “Quibi 2.0” that involved “belt-tightening” and “business scenario planning.” Executives acknowledged Quibi had a large pool of inactive users, but said “the content is resonating.” 

Quibi then got to work on features that would allow users to stream shows on their TVs, ultimately heeding advisers’ pre-launch warnings, the first of which was available in May. 

Mr. Katzenberg, a famously fastidious executive, gave copious input on the shows Quibi was developing with partner companies, according to people familiar with the matter. While developing a daily news show with NBC News, Mr. Katzenberg helped select the anchor and insisted the host wear a suit and sit behind a desk, a style some people involved thought was stiff and was striking the wrong tone for a youth-focused app.

Jeffrey Katzenberg had grand visions for Quibi.PHOTO: MARTINA ALBERTAZZI/BLOOMBERG NEWS

Mr. Katzenberg, who made his name as the head of Disney’s movie studio in the 1980s and 1990s, shepherding animated hits such as “The Lion King” and “Beauty and the Beast,” had grand visions for Quibi. He wanted a name that would be used as a common noun, like “Kleenex,” according to a person familiar with the company’s branding. Executives floated several proposed names, including “Ijji” and “Omakase,” which is used to describe high-quality sushi, before settling on Quibi.

Though Quibi didn’t last long, the company had its share of internal drama. There was a section of a stairwell in Quibi’s office building where some employees went to cry, some of the people said. 

Many other employees spoke highly of their experience at the company. Soon after Quibi announced its shutdown, more than 30 Quibi employees expressed positive feelings on LinkedIn such as pride in building the service and praise for their colleagues. “Say what you will about the idea, the timing, or the business strategy, but this was an absolutely world class team,” one employee wrote.https://tpc.googlesyndication.com/safeframe/1-0-37/html/container.html

The Quibi spokeswoman said that a summary of an employee survey prepared in February, before the launch, showed that the company scored high in areas including “commitment to the company” and “job satisfaction.”

Months after she joined, Ms. Whitman sent Mr. Katzenberg an email laying out her complaints about his behavior. She said he was treating her like an underling, demeaning employees and micromanaging the company, according to a person familiar with her concerns. 

Meg Whitman was recruited as chief executive officer of Quibi. PHOTO: MARTINA ALBERTAZZI/BLOOMBERG NEWS

“This cannot continue as no one will know who’s in charge and everyone will think they have two bosses who don’t ever set the same direction,” Ms. Whitman wrote. “I’ve seen this movie before and it is a disaster.” She threatened to quit unless things changed, adding that she had accomplished a lot and had “nothing to prove.” 

Ms. Whitman and Mr. Katzenberg ultimately found common ground. 

As Quibi’s business challenges mounted over this summer, Quibi considered a proposal to slash spending on marketing substantially. Mr. Katzenberg rejected that idea and approved an advertising blitz on TV, billboards and digital media, according to a person familiar with the deliberations.

Mr. Katzenberg would sometimes point out Netflix spent millions to promote the action drama “Extraction.” Those around him said Quibi shouldn’t compare itself to Netflix.

For months, executives were considering moving Quibi to a freemium model, people close to the company said. Ms. Whitman and Mr. Katzenberg were waiting for results from a trial run in Australia. Ultimately, the company decided not to pursue that strategy, in part because it would have been too expensive.

By September the company had performed a few “hack-a-thons,” in which employees were encouraged to bring their ideas to help the company attract customers.

Quibi ramped up efforts to get its TV streaming apps distributed so more viewers could watch the service in their homes during the pandemic. Previously, Quibi customers had to cast content from their phones to their TV through Chromecast or Apple’s Airplay, a clunky process. The tech team built an app for Apple TV, Android TV and Amazon’s Fire TV devices, readying it for mid-October, according to Quibi engineers.

The Quibi spokeswoman said the company wanted to get a version out that could be used by customers as quickly as possible. 

An advertisement for Quibi in a subway station in New York City in October.PHOTO: GETTY IMAGES

Meanwhile, the company launched an effort to explore a sale. Pitches to NBCUniversal, Amazon and Facebook Inc. went nowhere. Quibi ultimately hired AlixPartners, a restructuring firm, people familiar with the matter said.

At an all-hands video call on Oct. 21, Quibi told its roughly 250 employees it would be closing and they would be paid severance. Mr. Katzenberg suggested employees listen to “Get Back Up Again,” a song from the soundtrack of “Trolls,” to lift their spirits, according to people familiar with the call. 

Quibi is now looking to sell off as much of its content as possible to other TV or streaming platforms. 

Of its remaining cash, Quibi has set aside $358 million to wind down the company, people familiar with its financials said. Over $50 million is being held in reserve to cover a variety of expenses, such as Quibi’s property lease and litigation risks—including from a patent and trade-secrets lawsuit brought by Eko, an interactive video company, the people said.

Eko filed papers Wednesday asking a Los Angeles federal court to require Quibi to set aside at least $101.9 million and for bank accounts and other assets connected to the technology to be frozen. In a statement, Quibi said Eko was abusing the legal system.

Write to Benjamin Mullin at Benjamin.Mullin@wsj.com and Lillian Rizzo at Lillian.Rizzo@wsj.com

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Harvey Yan


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