Less than a year after launching, short video maker Quibi is now exploring options that could include a sale.
What Happened: The Wall Street Journal is reporting Quibi is “exploring strategic options” for the future. The report says the company could seek additional funding or go public via a SPAC as an easy way to raise public funds.
“Quibi has successfully launched a new business and pioneered a new form of storytelling and state-of-the-art platform. Jeffrey and Meg are committed to continuing to build the business in the way that gives the greatest experience for customers, the greatest value for shareholders and greatest opportunity for employees,” a statement from the company read.
About Quibi: Launched by industry veterans Jeffrey Katzenberg and Meg Whitman, Quibi wanted to bring 10-minute shows to users to capture an on-the-go short-form video viewing experience. Categories included movies in the form of “chapters”, documentaries, sports, reports, and reality shows.
Quibi signed deals with many top Hollywood “A-listers” like Steven Spielberg, Jennifer Lopez, Idris Elba, Chrissy Teigen and Kevin Hart.
Quibi costs $4.99 a month with ads and $7.99 a month without ads.
Poor Initial Results: Quibi leadership blamed the coronavirus as the reason why the mobile-only launch was unsuccessful. This came at a time when streaming companies like Netflix NFLX and Disney+ DIS were seeing huge spikes in subscribers and viewership.
A month into its launch, Quibi had a reported 3.5 million downloads and 1.3 million active users.
Targeting a digital audience for short-form competition put Quibi in direct competition for attention spans that have shifted to companies like TikTok, Twitter TWTR, Snapchat SNAP and Google's GOOG YouTube.
Emmy host Jimmy Kimmel joked that Quibi was “the dumbest thing to ever cost a billion dollars.”
What’s Next: There are several SPACs targeting a merger with a media company that could become players with the Quibi news.
Vistas Media Acquisition VMAC and CIIG Merger Group CIIG both listed media as a target area but may not be big enough to acquire Quibi given its large prior funding amounts. Dragoneer Growth Opportunities DGNR raised $690 million and listed media as one of its target areas.
Streaming companies could also look at acquiring Quibi for its roster of experienced executives and A-list partnerships.
Quibi raised over $1 billion before launching. Investors in the company include Disney, AT&T T, Lions Gate Entertainment LGF, and ViacomCBS VIAC.
All of those media companies could now be listed as potential acquirers or providers of more capital to help save the company going forward.
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