Just as Quibi is launching apps on select smart TV platforms like Android TV, word hits that it may all be for naught if a buyer isn’t found, and very quickly. That doesn’t bode well if you’re looking to make a profit off of the short-lived service, but a bargain for those interested investors. The downside is that most people still don’t know about Quibi.
It might explains why Quibi for Android TV is rather barebones for those checking it out with Chromecast on Google TV. On Monday, it also made it available for Amazon Fire TV and Apple TV. This rushed output might be in hopes of upping the sale price for Jeffrey Katzenberg.
Quibi, the short video streaming service launched with great fanfare in April, may have to shut down if a buyer isn’t found, specialty news site The Information reported Tuesday.
Quibi founder and former Disney CEO Jeffrey Katzenberg has tried to sell its catalog of programming to several companies including to NBCUniversal and Facebook — both of which declined, the tech news website reported. In March, Quibi announced that it had closed a $750 million funding round bringing its total money raised to $1.75 billion.
Katzenberg “has told people in the industry that he may have to shut down the company,” The Information said, citing a person who spoke to him.
Quibi opened for business in the United States and Canada six months ago as the effects of the novel coronavirus pandemic began to set in.
Its goal was to shake up the video content industry by providing 10-minute original Hollywood-quality programs delivered to smartphones and mobile devices.
Thanks to Kazenberg’s reputation and the billions of dollars promised, the project won over big-name movie and TV personalities to produce films and series, including the likes of Steven Spielberg, Guillermo del Toro, Jennifer Lopez and Reese Witherspoon.
Now Katzenberg wants to sell this content.
According to The Information, Katzenberg has already contacted Eddy Cue, an Apple vice president and WarnerMedia CEO Jason Kilar, as well as Facebook and NBCUniversal. There was no interest, the site reported.
Quibi bet big, with 50 programs available from day one.
The company was paying $100,000 a minute for feature films — a rate comparable to big productions by Netflix, Amazon, HBO Max or Disney+, Quibi CEO Meg Whitman earlier told media outlets.
Quibi also wanted to offer daily news reports, sports programs and entertainment shows, content difficult to produce while under pandemic lockdown.
Seeking to attract more customers, Quibi increased its trial offer from two weeks to 90 days, while the subscription price — $5 per month with advertising or $8 without — is comparable to the Disney+ service.
The strategy however does not seem to have worked.
Quibi had reportedly been counting on several million subscribers by April 2021, but six months after its launch it has only a few hundred thousand, including those who have the service for free via their operator.
Netflix See Subscriber Slowdown But Still Ahead For 2020
Netflix’s subscriber growth slowed dramatically during the summer months after surging in the spring fueled by pandemic lockdowns that corralled millions of people in their homes.
The summer slump came as more people sought distraction from the pandemic outdoors and major U.S. professional sports resumed play, offering other entertainment alternatives to the world’s most popular video streaming service.
The drop-off disclosed Tuesday in Netflix’s latest earnings report was more dramatic than management had warned it might be.
After picking up 2.2 million customers in the July-September period, Netflix finished the quarter with 195.2 million worldwide subscribers. Earlier, company had forecast an addition of 2.5 million subscribers during the quarter.
Even so, Netflix is still ahead for the year. It has added 28 million subscribers through the first nine months of the year — locking in the company’s largest annual increase in its history.
But the momentum seems to be tapering off, based on the trends Netflix is seeing. The company is projecting a gain of 6 million subscribers in the October-December period, down from 8.8 million last year. Analysts were expecting Netflix to project a gain of 6.4 million subscribers for the final quarter of this year.
The influx of new subscribers has helped boost its stock by 59% so far this year. But shares of Netflix fell $28.53, or 5.4% to $496.89 in after-hours trading after the results came out.
Wall Street generally still sees big things ahead for Netflix, which is based in Los Gatos, California, with its video streaming service poised to surpass 200 million subscribers soon.
Even with the summer slowdown, Netflix’s popularity has spurred speculation whether the company may soon raise its U.S. monthly subscription prices by another dollar or two in the U.S., as it recently did in Canada earlier this month. The company recently stopped offering free one-month trials in the U.S., a move some analysts viewed as a precursor to a potential price increase. Netflix’s most popular U.S. plan costs $13 per month.
The company has periodically raised its prices to help pay for the original programming that has helped turn it into a cultural phenomenon in the face of intensifying competition from even bigger rivals such as Amazon and Apple. Higher prices also help boost Netflix’s profit, which have remained relatively modest in light of its video service’s widening appeal.
After a “blowout” first quarter and a strong second, it is “it is reasonable to think” Netflix would take a breather in new subscriber gains for the third, said Dan Morgan, a senior portfolio manager at Synovus Trust.
The company earned $790, million, or $1.74 per share, in the third quarter, up 19% from $665 million, or $1.47 per share, a year earlier.
Revenue climbed 22.5% to $6.44 billion from $5.24 billion.
Analysts were expecting earnings of $2.13 per share and revenue of $6.39 billion, according to a poll by FactSet.
Netflix said as the world “hopefully recovers” from COVID-19 in 2021, it expects its subscriber growth to revert back to pre-pandemic levels. That means growth will be much slower in the first half of next year than it was this year.