Reports: Quibi cuts senior executive pay by 10%

Brief:

Quibi is cutting the salaries of senior executives by 10% as the startup looks to reduce costs after a lackluster rollout. Quibi CEO Meg Whitman and chairman Jeffrey Katzenberg agreed to a 10% cut in their pay, according a staff memo cited by The Hollywood Reporter.
Quibi management had discussed whether to eliminate 10% of its more than 250 employees, but didn't plan to follow through on those talks, The Wall Street Journal reported, citing unnamed sources. "We are not laying off staff as part of cost saving measures," Whitman and Katzenberg said in their memo.
Quibi has been downloaded 4.5 million times and has 1.6 million subscribers to its free trial, per The Hollywood Reporter.

Insight:

Quibi's reported cost-saving measures are the latest indication that the well-funded startup is struggling to grow its audience and satisfy advertisers that made early upfront commitments to its app focused on snackable video content.

The coronavirus pandemic has upended the media marketplace, leading many advertisers to slash spending, delay campaigns or revamp their marketing strategies. The health crisis also has had a profound effect on media consumption habits, including the time spent watching video on mobile devices. Quibi was started with the idea that younger audiences were seeking shorter video programming that they could watch while on the go, but pandemic lockdowns led viewers to spend more time watching TV.

Quibi's salary cuts come just a week after The Wall Street Journal reported that blue-chip advertisers such as PepsiCo, Yum Brands' Taco Bell, AB InBev nd Walmart were trying to renegotiate deal terms with the company. Some advertisers were concerned that the platform hadn't gained significant viewership since its April 6 launch. The contract terms guarantee a certain level of ad viewership, but marketers were worried about missed targets, the paper reported. At that time, the company already had began to enact several cost-cutting measures, such as slowing hiring initiatives and cutting down on the number of contractors it uses.

Quibi is among the media platforms that are coping with budget-conscious sponsors amid the pandemic. One-third of advertisers surveyed by Advertiser Perceptions said they were planning to spend less on the TV upfronts this season, as one example. Digital platforms like Twitter and Facebook have also warned of a hit to revenue if advertiser demand continues to fall.