Quibi was the biggest bust of the streaming boom. But it has something Roku wants – 100+ original programs.
Quibi, which announced it will close six months after a much-touted launch, is in talks to sell its content to Roku, the maker of streaming devices with its own streaming app.
The deal is nearing completion, said a person with knowledge of the discussions who was not empowered to speak publicly. Quibi and Roku declined to comment.
Quibi was founded by Jeffrey Katzenberg and Meg Whitman, who raised more than $ 1.75 billion from major Hollywood studios and other investors. Quibi was a Quixotic attempt to capitalize on the streaming boom. The shows that were cut in installments no longer than 10 minutes should be viewed on smartphones.
The approach assumed that people wanted this type of viewing experience to help them out during their daily commute or while waiting in line for coffee, but the coronavirus pandemic meant potential customers were no more than the platform ran live in April.
Mr Katzenberg blamed the pandemic for Quibi’s speedy demise, while others cited the unusual format and some of his creative choices, including a show starring Emmy award-winning Rachel Brosnahan as a character obsessed with her own golden arm.
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Still, Quibi won two Emmy Awards in the Short Form category for actors Laurence Fishburne and Jasmine Cephas Jones in the series “#FreeRayshawn”. Two of his other shows achieved nominations: “Most Dangerous Game” with Christoph Waltz and Liam Hemsworth and a reboot of the comedy “Reno 911!”
This is where Roku comes in. The company needs material for its Roku TV app. And Quibi, which has not yet gone dark, will soon have plenty of material that could remain invisible.
Quibi’s unusual business strategies complicate the talks, first reported in the Wall Street Journal. Mr. Katzenberg and Ms. Whitman did not pursue ownership of the platform’s content, but bought the exclusive rights from the creators to stream their shows for seven years. The arrangement was attractive to producers who retained the right to later resell the shows to another service such as Netflix. It is unclear how a sale would affect the rights of content producers.
Best known for its easy-to-use streaming devices, Roku generates almost two-thirds of its sales from its media division. Roku TV, a free, ad-supported streaming channel, offers films and shows from other companies without having a substantial inventory of its original content.
Despite the relatively low cost of digital platforms, the streaming bills add up as the digital media industry matures and expands. The average household only pays for three services at a time, and exclusive content in a free app is likely to draw an audience.
The newest entrant, Discovery +, a platform based on 55,000 hours of unwritten shows, went live on Monday and arrived in a crowded box that featured Netflix as well as Peacock from NBCUniversal, HBO Max, Disney +, AppleTV + and CBS All Access (coming soon) are renamed Paramount +) and Hulu.
Roku has grown into a streaming force by using its distribution power – it claims 46 million accounts – to boost its media business. After much disagreement, Roku recently signed a deal with AT&T to offer its HBO Max service. Roku wanted more access to ad inventory on AT & T’s upcoming ad-based streaming platform and rights to Warner Bros. content.