While Quibi’s disappointing audience performance during its first six months on the market has been widely—and in many cases gleefully—reported, so has the start-up’s success at raising capital, which totaled $1.8 billion at launch.
Unfortunately for founder Jeffrey Katzenberg and his mobile-first streaming service, it looks like Quibi might need to come up with a lot more cash to keep going.
Bloomberg said it crunched the numbers and found that Katzenberg is going to need to come up with another $1.8 billion by 2024 to keep his platform alive. At the current trajectory, Quibi will come up about $6 billion short by 2030.
“By compiling Quibi’s reported and public statements about content spending, advertising, subscribers and more, a picture emerges of a company headed for financial distress after a tough first year,” the Bloomberg report said.
Quibi’s reliance on original content is one factor that makes its operational costs significant. And as has been widely reported, the company works with top-level producers, paying top dollar for shows produced in dual production workflows (one for landscape, one for profile), so Quibi original content isn’t cheap.
The platform also has the generous producer clause that gives ownership of shows back to makers after seven years.
So yeah, making TV shows for smart phones can cost a lot of money.
The Bloomberg report comes a few weeks after Wall Street Journal reported that Katzenberg was exploring a possible sale of Quibi, or maybe even an initial public offering involving a special purpose acquisition company.
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