Sources: Quibi's projections from 2019 show the upcoming streaming service is expected to spend ~$1.5B in its first year; Quibi has raised $1.4B so far
oh... https://www.theinformation.com/ ... @cityofthetown @jtoonkel Gerry Smith / @gerryfsmith : “Many studio executives saw taking a stake in Quibi as a form of what they called “schmuck insurance.” https://www.theinformation.com/ ... https://twitter.com/... Alex Heath / @alexeheath : Last year Quibi projected burning $1.5 billion in 1st year of launch - Forecasts $260 million in subscriber rev in 1st year, climbing to $700 million year after - Hoping to raise $100m more by next month @cityofthetown & @jtoonkel get the goods https://www.theinformation.com/ ... Casey Newton / @caseynewton : I think they'll get there! https://twitter.com/... Jessica Lessin / @jessicalessin : Quibi at one point last year was projecting it would burn $1.5 billion in the first year of its operation. Staggering detail along with other financials from @cityofthetown and @jtoonkel https://www.theinformation.com/ ... See also Mediagazer
Context & Ripple Effects
Quibi has been assembling its war chest in public stages — an initial billion-dollar raise followed by plans for up to another $1B round — while locking in more than $100M in ad commitments from Google, P&G, PepsiCo, Walmart, and Anheuser-Busch ahead of its April 2020 debut. What was missing until now is the internal math behind those raises.
The leaked projections close that gap: Katzenberg and Whitman's service planned to spend roughly $1.5B in year one against only $260M in forecast subscriber revenue, climbing to $700M in year two — meaning the entire model depends on raising beyond the $1.4B already secured, with studio investors reportedly treating their stakes as 'schmuck insurance.'
First-order effects
- Quibi must raise at least $100M more by next month or enter its April 6 launch without full funding for its projected first-year burn, since $1.4B raised falls short of the ~$1.5B spending plan.
Second-order effects
- With subscriber revenue covering under a fifth of first-year costs even on Quibi's own optimistic forecast, the company leans harder on its $100M+ advertiser base — Google, P&G, PepsiCo, Walmart, Anheuser-Busch — making renewal of those ad deals the real test of the two-tier pricing model ($7.99 ad-free, $4.99 with pre-roll).
Third-order effects
- If the pattern holds, the episode validates the 'schmuck insurance' framing for studio investors: backing every new streaming entrant defensively rather than on conviction, which inflates capital available to unproven subscription services and delays the reckoning over whether short-form mobile video can sustain them.
The trend: Streaming services are launching on venture-scale capital raises sized to multi-year losses rather than near-term revenue, with investor FOMO — not unit economics — setting the funding floor.