How Quibi became 2020's biggest dud in digital media
And the winner of the Biggest Media Fail of the year is ... Quibi.
Almost everything about Quibi was a flop, from conception to promotion to launch. It was a $1.8 billion dollar dud, and some of the brands that came along for the ride are waiting for their money back from the Hollywood disaster.
Few media endeavors have had such spectacular flameouts and, like Quibi’s short-form shows, the end came quickly. Quibi closed in December after operating for just six months. So, looking back on 2020, Quibi deserves a special place on the list of brand blunders.
Hollywood impresario Jeffrey Katzenberg wanted to revolutionize entertainment with his app, coming up with the name, which meant “quick bite,” a nod to the 6- to 10-minute installments of shows and movies it featured. The company raised $1.8 billion and threw the cash, hand over fist, at almost anyone with an idea. The programs would be available only on mobile phones through a Quibi subscription app that cost about the same as Hulu. (The price was $4.99 with ads and $7.99 without.)
Katzenberg, who had been a bankable commodity for decades, was aggressive. He was confident that Quibi would upend mobile digital entertainment, taking it from a playground for amateur YouTubers to high-production blockbusters for the phone. “I’ve been doing this before you all were fucking born,” Katzenberg famously told a crowd of attendees at CES in Las Vegas at the start of year.
“That attitude was one of the biggest things contributing to its demise,” says an ad agency exec who worked with brands that were among the early sponsors of Quibi.
Quibi had high hopes for shows, and ads. It adopted a type of ad format called “turnstyle,” which played commercials in full screen no matter which direction a viewer held the phone. Quibi made $150 million before the app launched in April, signing up about 10 official sponsors representing about 25 brands, including Progressive, T-Mobile, Google, Taco Bell, Anheuser-Busch InBev, Walmart, General Mills, Procter & Gamble and PepsiCo.
Now, as Quibi unwinds the business after failing to catch on with enough subscribers, the company says it will return money to brands. “Quibi wants to do right by advertisers, employees, investors, and creators and we'll have more to share at the beginning of the new year,” a Quibi spokeswoman said by email.
A miss out of the gate
There are a number of flubs that led to Quibi’s demise, from missed marketing opportunities to a lawsuit over the “turnstyle” ad technology that another startup claimed was stolen.
Quibi’s first real introduction to consumers was through a Super Bowl spot this year, one that focused on the name of the service and explaining what it was, rather than focusing on the entertainment itself.
After launch, Quibi tried to correct that early marketing miss by retooling the message and highlighting the shows. Some of the titles were critically received, and Quibi picked up Emmy Awards for a show about policing called “FreeRayShawn.” Stars including Reese Witherspoon, Anna Kendrick, Chance the Rapper, Kevin Hart and Liam Hemsworth were among the talent on the app.
Quibi also made it difficult for its few fans to show their appreciation of the shows they followed. Quibi notoriously did not allow people to share the shows, or even clips from the shows, to social media. So a viewer couldn’t take a video from Quibi and post it to Twitter or Instagram, which limited the ability to spread the word about the service.
Quibi wasn’t responsible for all its woes. The app launched in April at the start of the COVID-19 lockdowns across the U.S. The app was supposed to be about watching shows while commuting or waiting in public spaces, but people weren’t going out.
Quibi didn’t even have a way for people to stream the shows to their TVs while at home. It tried to adapt by developing a connected TV feature, but that didn’t help much.
In the end, Quibi wound up with approximately 500,000 subscribers, well below the pace it needed to reach the 7 million it promised advertisers.
The advertisers said that Quibi wound up being a costly experiment. The “turnstyle” commercials were expensive to create, and when the platform launched in the pandemic, some of the ads were a little off-message. Brands had built the spots for a pre-pandemic world, and many advertisers had spent April redoing campaigns across all media to fit the times. Quibi’s unique ad format made changing creative on-the-fly more difficult, advertisers have told Ad Age.
“It wasn’t worth the money we paid them,” one marketing executive from a Quibi sponsor told Ad Age in September.
In October, Quibi announced it was shutting down. Even the way that was handled was ridiculed, though.
Katzenberg and CEO Meg Whitman wrote a letter to staff and Quibi stakeholders, saying that their failure was either bad timing or that the concept just was not sound enough. The execs thanked the team, but in a seemingly tone-deaf word of encouragement they recommended the newly laid-off staff take comfort in a song, “Get Back Up Again.”
And that was the end of Quibi—except as, perhaps, a future “Jeopardy!” answer and a running joke on Twitter.