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On April 6th, 2020, Quibi burst onto the streaming scene, boasting 50 original titles and featuring a star-studded lineup. With Hollywood heavyweights like Steven Spielberg, Zac Efron, and Chrissy Teigen headlining the content, the buzz was real. In its first week, Quibi racked up 1.7 million downloads, and CEO Meg Whitman couldn’t have been more thrilled. In a CBS interview, she declared the launch a success beyond her expectations, calling it one of the most successful launches of a brand-new app.
But just two months later, that shine started to fade—fast. Quibi lost 90% of its early subscribers when their free trial expired. With only an 8% conversion rate, the platform’s financial health took a hit, leaving its team scratching their heads over how their marketing strategy had missed the mark so dramatically. By October 2020, Quibi shut down, a mere six months after its hyped debut.
So, what went wrong?
A Meteoric Launch
Quibi’s foundation was strong, at least on paper. It was the brainchild of Jeffrey Katzenberg, the acclaimed film producer and co-founder of DreamWorks SKG, and Meg Whitman, a seasoned executive with a stellar track record as the CEO of eBay and HP. With these two powerhouses at the helm, Quibi easily attracted investors, including some of the biggest names in entertainment and finance—Disney, Fox, NBCUniversal, Sony, and Goldman Sachs, to name a few. They raised a staggering $1.75 billion in funding.
Even before launch, industry leaders expressed confidence in the platform. Lachlan Murdoch, CEO of Fox Corporation, told the Hollywood Reporter, “If anyone can make it work, it’s Jeffrey.” It seemed Quibi had everything: A-list celebrities, big-name investors, and veteran leadership. The stars were aligned for success.
The Illusion of a Successful Launch
When Quibi went live in April 2020, it offered an attractive deal: sign up by the end of the month, and you’d get a 90-day free trial. After that, you could choose between a $4.99 ad-supported plan or an ad-free version for $7.99. The platform also struck a deal with T-Mobile to offer free subscriptions for a year to its unlimited family plan users, boosting its initial numbers.
On launch day, 300,000 people downloaded Quibi. By day two, it was the №4 most downloaded free app on the Apple App Store in the U.S. and №81 on Google Play. But while those numbers sounded impressive, they didn’t hold up when compared to the competition. Disney+, for instance, saw 4 million downloads on its launch day alone, dwarfing Quibi’s figures. Still, Whitman was optimistic, calling the 1.7 million downloads in the first week “one of the most successful launches of a completely new app.”
But then came the harsh reality check. Two months after launch, 90% of those early users jumped ship once their free trial ended. Whitman had predicted that 75% of them would convert into paying subscribers—what actually happened was a conversion rate of just 8%. The excitement faded fast, and soon enough, layoffs were on the table. By June, the company was considering cutting 10% of its 250 employees, and Whitman took a voluntary 10% pay cut.
Why Did 90% Not Subscribe?
Every great idea stems from a need, but was Quibi really the solution to a problem? Was it created out of our desire to fill 10 minutes of downtime by watching bite-sized content on our phones? Critics argue otherwise. In a market overflowing with options like TikTok, YouTube, Netflix, and HBO, Quibi didn’t offer anything unique. Users weren’t clamoring for yet another way to pass the time during their commutes—or, as it turned out, during a pandemic where no one was commuting at all.
Quibi's concept was fundamentally flawed: it was designed for people on the go at a time when everyone was stuck at home. And even the biggest platforms—Facebook, Twitter, and Instagram—haven’t convinced people to use their apps during those fleeting "in-between" moments. So why would Quibi?
Moreover, Quibi wasn’t integrated into the broader social media ecosystem. The app didn’t allow users to take screenshots, leave comments, or share videos across other platforms. It also launched exclusively on mobile phones, with no TV streaming option—something critics quickly pointed out as a major drawback. When asked about this limitation, Whitman admitted that a TV version was always part of the plan but had to be expedited due to COVID-19. Even so, the damage was already done.
Social media influencers offered to help promote Quibi by featuring it on their personal accounts, but the company turned them down. Quibi’s lack of organic social media growth and integration kept it from catching on with users in the way platforms like TikTok have mastered.
A False Sense of Innovation
Quibi's founders believed they were ushering in a revolution in the streaming industry. But was Quibi truly innovative? The answer, according to critics, is no. Quibi didn’t reinvent the wheel. It was a hybrid of two things people already had: the short-form content of TikTok and the high production value of Netflix. The only difference was that Quibi’s content came from Hollywood rather than everyday users.
This misconception of innovation led to another common startup mistake—rushing to launch without truly assessing the timing. Katzenberg and Whitman believed their platform was perfect for people on the move, but their timing couldn’t have been worse. They launched during the height of the COVID-19 pandemic, when no one was on the move. Whitman brushed it off, saying, “It didn’t hurt us at all. People are watching Quibi from 7:00 AM to 7:00 PM in between Zoom calls and household chores.” But the numbers said otherwise.
Blaming the Pandemic: The Self-Serving Bias
While it’s clear that launching during the pandemic wasn’t ideal, Quibi’s leadership seemed reluctant to take responsibility for their mistakes. In May 2020, Katzenberg famously said, “I attribute everything that has gone wrong to coronavirus.” This is a classic example of the self-serving bias, where external factors get the blame, and internal missteps go unacknowledged. The pandemic certainly didn’t help, but it wasn’t the root cause of Quibi’s struggles.
Overconfidence and Market Misjudgment
Experience, fame, and deep pockets gave Katzenberg and Whitman a sense of invincibility that ultimately backfired. They oversimplified the competition, assuming Quibi would carve out its own unique niche. But consumers didn’t see it that way. Quibi was still competing against the likes of Netflix, YouTube, and TikTok, and it didn’t stand out in the crowded streaming landscape.
Bottom Line
Quibi’s downfall boils down to a clear mismatch between product and market. It was designed to entertain people on the go, yet launched during a global lockdown. Overconfidence led to decisions that defied market realities, and a service that was neither fully understood nor truly needed by its target audience.
In the end, even Katzenberg admitted as much. In an October 2020 interview with CNBC, he reflected on Quibi’s failure, saying, “I thought there would be easier adoption to it. Yes, we had a new product. We asked people to pay for it before they actually understood what it was.” By the time they realized their mistakes, it was too late.
