Katzenberg Blames COVID-19 for Quibi’s Slow Start

With 3.5 million app downloads (and 1.3 million active users) since launching on April 6, streaming video platform Quibi is not Disney+, Netflix, or even Acorn TV. And with billions of dollars in backing, the ambitious start-up from DreamWorks Animation founder Jeffrey Katzenberg and former Hewlett-Packard CEO Meg Whitman finds Katzenberg on the defensive.

In an interview with The New York Times, Katzenberg laments how the coronavirus pandemic and resulting nationwide home quarantines undermined the Quibi app’s mobile-centric target user.

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“I attribute everything that has gone wrong to coronavirus. Everything. But we own it,” Jeffrey Katzenberg told The Times.

Since its launch, Quibi (which stands for “quick bites”) offers original video content from big-name talent and directors no longer than 10 minutes in length. After debuting in the top three app downloads, the platform now ranks 125th, according to Sensor Tower.

“Is it the avalanche of people that we wanted and were going for out of launch? The answer is no. It’s not up to what we wanted. It’s not close to what we wanted,” Katzenberg said.

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Indeed, while attributing business failure to a pandemic seems easy, some observers contend Quibi’s mobile-only platform was doomed regardless of COVID-19.

“Quibi’s failure is due to its restrictive nature,” Danyaal Rashid, analyst with Global Thematic Research, said in a note. “The platform only supports mobile viewing and short-form video; the content library is weak compared to larger streamers; and at $7.99 (€9.05) a month [without ads], it is expensive – Disney+ is just $6.99 a month.”

Quibi has also been sued by Israeli tech company Eko, which claims the app’s technology enabling users to watch video either in vertical or horizontal position on their cell phone, is their invention.

“This is a case to stop the theft of Eko’s technology by Quibi, alleging a civil action for patent infringement under the patent laws of the United States, and misappropriation of trade secrets,” Eko alleged in a complaint filed March 10 in U.S. District Court in Los Angeles. Quibi has filed a countersuit.

Meanwhile, Whitman remains more positive. In a May 11 interview with CNN Business, the former GOP California gubinatorial candidate said Quibi is a new brand with original content attempting to attract millions of eyeballs.

“We came to market with no library, no legacy product and we’re starting from scratch,” Whitman said. “I know how hard it is to gain people’s attention, particularly in a pandemic. But I feel really good about where we are, even though we’re five weeks old.”

Maybe, but Verizon felt equally confident about its mobile-centric entertainment app, go90, which launched in 2015 with original content from Ben Affleck, Matt Damon and Kobe Bryant’s Oscar-winning short, Dear Basketball. It shuttered less than three years later with losses reaching $1 billion and Verizon CEO Lowell McAdam retiring.

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