Quibi Closes $750 Million Second Round of Funding a Month Ahead of Official Launch
It seems Quibi is gearing up for a successful launch next month as the upcoming streaming service announced they closed $750 million in second-round funding, Variety reports. Quibi didn’t reveal names of investors in this round, but revealed funding came from new and existing investors including “studios, major technology companies, strategic partners and financial investors.” To date, the company has garnered $1.75 billion.
“We concluded a very successful second raise which will provide Quibi with a strong cash runway,” Quibi CFO Ambereen Toubassy said in a statement to Variety. “This round of $750 million gives us tremendous flexibility and the financial wherewithal to build content and technology that consumers embrace.”
In order to secure some traction in the already saturated streaming industry, Quibi has been doling out major bucks for their content. Variety stated that the streamer is spending approximately $6 million per hour of programming, created and licensed from Hollywood heavy-hitters such like Steven Spielberg, Antoine Fuqua, Reese Witherspoon and Guillermo del Toro.
In addition, the service is spending up to $100,000 per minute on production budgets for originals all while paying a 20 percent profit margin to creators and studios. Quibi’s business model is also different in that they don’t own the content created for the platform. Instead, they will be licensing content for seven years, and also giving creators the freedom to repackage episodes into a single film after two years.
Earlier this year, Quibi CEO Meg Whitman, along with Quibi founder Jeffrey Katzenberg and Quibi chief product officer Tom Conrad, attended CES 2020 to reveal more info about the service. In addition to premiering 175 new original shows and 8,500 quick bites of content, including comedies, dramas, dating shows and news in the year following its launch, the service will introduce a new innovation they call “Turnstyle,” which allows for seamless fullscreen viewing whether the consumer is holding their phone in landscape or portrait mode.
During the Upfront Summit in Los Angeles which took place in January, Whitman revealed that while they’re not competing with Netflix and other streamers for time, they’re definitely competing for customers’ dollars.
“I don’t think that we compete for time with the big streaming services … because only 10 percent of their viewing takes place on the mobile phone and virtually none of it takes place during the day. It’s mostly an evening or weekend experience,” Whitman said. “We do compete for entertainment dollars across a whole host of things you can spend money on — whether that’s gaming or streaming services.”
Quibi (short for quick bites) will launch on April 6 and focus on high-quality short form content that is designed to be watched on your smartphone. The mobile streaming streaming will offer two plans — $4.99 with ads and $7.99 without ads. The ad-supported product will include a pre-roll ad, as well as a one to two mid-roll ads depending on the length of the content.