Quibi Can Be Sold Six Months After Launch
Hollywood Mogul Jeffrey Katzenberg, who launched the streaming service Quibi in April this year, is considering selling his business, according to the WSJ, citing sources in the company.
The service, which offers viewers to watch programs and series in five-to ten-minute segments, is expected to attract 7 million paid subscribers in its first year of operation and 16 million in its first three years of operation. However, as the sources note, it is already obvious that the company will not be able to achieve its goals. In May, it was reported that 1.2 million of the service's 4.2 million users had used a free 90-day trial subscription. Many of those who decided to apply for paid access later refused it.
According to the publication, now the management is considering several options for strategic business development. In addition to its sale (before the launch, the estimated cost of the service was $1.5 billion), the option of entering the stock exchange or finding new investors is also being considered. At the same time, sources note that the company has a reserve of cash for several more months. Previously, Quibi management predicted that by the third quarter, the service's expenses would reach $1 billion, and the company will end 2020 with an operating loss of $550 million.
Quibi declined to comment on the Wall Street Journal's information.