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How Quibi’s Boomer Execs Sabotaged A $2BN Company By Being Completely Out Of Touch

How Quibi’s Boomer Execs Sabotaged A $2BN Company By Being Completely Out Of Touch

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How Quibi's Boomer Execs Sabotaged A $2BN Company By Being Completely Out Of Touch Tyler Durden Thu, 11/12/2020 - 19:20

the downfall of Quibi has created an interesting counterpoint to the fall of Theranos. Though the companies were situated in very different industries, the Theranos story centers around a young woman who treacherously conned investors, journalists and even some of her own employees, before a small group of rebels gave the story up to the Wall Street Journal, which brough the whole sham crashing down.

On the other hand, Quibi wasn't an illegal scheme; it remains an obviously legitimate business, and it's certainly possible that a rival like Netflix or Hulu might scoop up some of the assets Quibi might be selling after Jeffrey Katzenberg announced plans to shut it down after an abysmal rollout during the pandemic that made the company into a laughingstock. Customers who signed up for Quibi's free trial quickly discovered, much to their eventual disappointment, that there was no way to watch the shows on their laptop, or a TV. Quibi's founders effectively engaged in an act of self-sabotage by ensuring that the smartphone app was the only venue in which their content - the quick "bites" from which Quibi's name is (again, confusingly) derived - could be consumed.

Many seemingly bone-headed decisions about the product, programming and the rollout have been documented by Bloomberg and WSJ (we've added our two cents' worth here and here), but since announcing plans to shut down, Katzenberg and Whitman, who have both been saddled with massive personal losses from the venture, have tried their hardest to project an air of humility and graciousness.

However, that task just got a lot harder, as Bloomberg's Businessweek earlier today published a deeply sourced piece elaborating on the many flaws and failures in Katzenberg's initial vision for the product. Those problems were only exacerbated by the out-of-touch arrogance exhibited by Katzenberg and his partner, Whitman, whom he recruited to the project, according to reports. Viewers who watched Whitman's early CNBC interviews pitching Quibi probably remember cringe-worthy moments, like when she reveals that the company's name is derived from the phrase "Quick Bites", or when she described Quibi as a revolutionary new medium, seemingly without realizing that hilarious short videos, sometimes with scripted plots, have been posted to YouTube for free since the mid-aughts.

Between shelling out $6 million to Reese Witherspoon to do a voice-over for an animal TV program that nobody watched, to Whitman awkwardly placing her newly purchased LA condo back on the market without saying a word to anyone at the company, Bloomberg chronicles many details from a company that was driven into the ground by two stubborn, know-it-all boomer executives who thought their focus-group-backed wisdom was simply beyond reproach.

The Condo Incident

Whitman, one of Silicon Valley’s most powerful women, had moved to L.A. to work with people like that. She’d been recruited a year earlier by Jeffrey Katzenberg, the Hollywood megaproducer who co-founded DreamWorks Animation, who was betting that the future of entertainment was short-form videos with old-school studio production values. Whitman was to be the CEO of a streaming service with episodic programming that aimed to wow a generation raised on YouTube.

But the service, called Quibi, premiered this past spring to crickets and jeers. Over the summer, Whitman talked her team through a retooling plan and acted as though she planned to remain in L.A. for a good, long while. But in early August, less than two years after she bought the Sierra Towers condo, she put it back on the market.

Her staffers noticed. Several circulated the real estate listing, spurring a wave of quiet searches for employment elsewhere. More than one marks that as the beginning of the end for Quibi. “When your CEO puts their L.A. home up for sale less than two years after buying it, that’s when you know the writing is on the wall,” says one former Quibi employee, who, like most of the 24 current and former staffers interviewed for this story, spoke on condition of anonymity to protect future job prospects.

That Song From 'Trolls'

When Katzenberg and Whitman finally broke news of the shutdown to employees, an unexpectedly swift death for a company that had launched its product just 7 months before. As misty eyes filled the room, Katzenberg reportedly encouraged his team to listen to a song from the animated feature film "Trolls" (one of Katzenberg's former projects) to help lift their spirits.

Toward the end of October, Quibi’s seventh month in the crowded streaming market, Whitman and Katzenberg assembled their employees on a video call to tell them the company would be shutting down around Dec. 1. A misty-eyed, apologetic Katzenberg encouraged employees to comfort themselves by playing the song Get Back Up Again from the DreamWorks movie Trolls.

TV On The Internet

In particular, several staffers told Bloomberg that Whitman and Katzenberg insisted on recruiting the most expensive Hollywood talent, instead of relying on cheaper social media stars with established followings among a younger audience that Quibi and its rivals covet. This was perhaps one of the biggest reasons why the company failed so quickly, as it blew its load by paying $6 million for Reese Witherspoon to do a voice-over for an animal show that nobody watched.

Bloomberg apparently saw a pitch-deck slide breaking down salaries paid for some of these "lighthouse" shows and...well...

Several current and former Quibi employees say Katzenberg built himself a punishing schedule. In the weeks after Quibi went live, he’d rise by 3:30 each morning, work out while reading the news from 5 a.m. to 7 a.m., and conduct as many as 20 FaceTime meetings a day, turning most any interaction along the way into an impromptu meeting about the company. He divided show ideas into three categories: the titular “quick bites” (short, one-off videos), “daily essentials” (news programs), and “lighthouse” shows (projects involving A-listers). The latter ate up most of the budget. According to a Quibi pitch deck seen by Bloomberg Businessweek, lighthouse shows generally cost $20,000 to $125,000 a minute, compared with roughly $10,000 a minute for daily essentials. Fuqua’s series, #FreeRayshawn, which stars Laurence Fishburne and Stephan James, cost $15 million for 15 episodes of 10 minutes each, a competitive budget for today’s streaming services. Netflix Inc.’s Stranger Things costs $6 million to $8 million for episodes that typically run for 45 minutes to an hour, and Disney+ is expected to spend as much as $25 million an episode on Marvel shows such as Hawkeye and WandaVision. But in another respect, Quibi sweetened the deals far beyond what other streaming services were willing to offer. Two years in, creators would be free to edit their Quibi shows together into an extended work and sell the longer version somewhere else. After seven years the company’s rights to the short-form versions would expire.

Katzenberg also applied his decades of development experience, something current and former employees say was part of the problem. The 69-year-old former wunderkind often insisted that he weigh in on everything from casting to wardrobe to graphic design, frequently via FaceTime with printouts of his notes next to him. He invested aggressively in somewhat out-there series with recognizable names attached, such as Most Dangerous Game, starring Liam Hemsworth and Christoph Waltz; Dummy, starring Anna Kendrick; and Thanks a Million, a giveaway reality show produced by Jennifer Lopez. To narrate voiceover for Fierce Queens, a wildlife program produced by BBC Studios, Quibi paid Reese Witherspoon $6 million. (Her husband, Jim Toth, was Quibi’s head of content acquisitions.)

What's Next?

Though SJW reporters would like to have the world believe that only men are capable of 'failing up', Whitman just might be moving on from Quibi with a job in the Biden administration, despite her history of...running for office (albeit, in California) as a Republican.

Whitman is an early contender for several cabinet-level positions in President-elect Joe Biden’s administration, according to three people familiar with the matter. Weeks after she put her L.A. condo up for sale, the former Republican gubernatorial candidate appeared during the Democratic National Convention to endorse Biden on national TV. “For me, the choice is simple,” Whitman said. “I’m with Joe.” It’s unclear what Katzenberg will do next, but the producer seems less likely to leave the entertainment industry behind. “One might wonder why sailing off into the sunset on a boat in the Caribbean isn’t an option for Jeffrey,” says Shapiro, the producer of Let’s Go, Atsuko! “But I don’t get the sense he’ll want this to be the last chapter of his storied career.”

It's worth noting that Katzenberg is also a major Democratic bundler, one of the biggest in Hollywood.

Many of her former employees weren't so lucky. Several complained to Bloomberg about feeling 'blindsided' by the shutdown, as Whitman and Katzenberg apparently kept the true enormity of the company's fiscal recklessness from the rest of the staff. In the end, many employees credited Katzenberg and his enormously over-inflated self-confidence, and his micromanaging style, for doing far more harm than good.

In the end, some $2 billion of investors' money was wasted. But at least Reese Witherspoon managed to secure a pretty generous payday.

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One city held a mass passport-getting event

A New Orleans congressman organized a way for people to apply for their passports en masse.

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While the number of Americans who do not have a passport has dropped steadily from more than 80% in 1990 to just over 50% now, a lack of knowledge around passport requirements still keeps a significant portion of the population away from international travel.

Over the four years that passed since the start of covid-19, passport offices have also been dealing with significant backlog due to the high numbers of people who were looking to get a passport post-pandemic. 

Related: Here is why it is (still) taking forever to get a passport

To deal with these concurrent issues, the U.S. State Department recently held a mass passport-getting event in the city of New Orleans. Called the "Passport Acceptance Event," the gathering was held at a local auditorium and invited residents of Louisiana’s 2nd Congressional District to complete a passport application on-site with the help of staff and government workers.

A passport case shows the seal featured on American passports.

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'Come apply for your passport, no appointment is required'

"Hey #LA02," Rep. Troy A. Carter Sr. (D-LA), whose office co-hosted the event alongside the city of New Orleans, wrote to his followers on Instagram  (META) . "My office is providing passport services at our #PassportAcceptance event. Come apply for your passport, no appointment is required."

More Travel:

The event was held on March 14 from 10 a.m. to 1 p.m. While it was designed for those who are already eligible for U.S. citizenship rather than as a way to help non-citizens with immigration questions, it helped those completing the application for the first time fill out forms and make sure they have the photographs and identity documents they need. The passport offices in New Orleans where one would normally have to bring already-completed forms have also been dealing with lines and would require one to book spots weeks in advance.

These are the countries with the highest-ranking passports in 2024

According to Carter Sr.'s communications team, those who submitted their passport application at the event also received expedited processing of two to three weeks (according to the State Department's website, times for regular processing are currently six to eight weeks).

While Carter Sr.'s office has not released the numbers of people who applied for a passport on March 14, photos from the event show that many took advantage of the opportunity to apply for a passport in a group setting and get expedited processing.

Every couple of months, a new ranking agency puts together a list of the most and least powerful passports in the world based on factors such as visa-free travel and opportunities for cross-border business.

In January, global citizenship and financial advisory firm Arton Capital identified United Arab Emirates as having the most powerful passport in 2024. While the United States topped the list of one such ranking in 2014, worsening relations with a number of countries as well as stricter immigration rules even as other countries have taken strides to create opportunities for investors and digital nomads caused the American passport to slip in recent years.

A UAE passport grants holders visa-free or visa-on-arrival access to 180 of the world’s 198 countries (this calculation includes disputed territories such as Kosovo and Western Sahara) while Americans currently have the same access to 151 countries.

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International

The millions of people not looking for work in the UK may be prioritising education, health and freedom

Economic inactivity is not always the worst option.

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Taking time out. pathdoc/Shutterstock

Around one in five British people of working age (16-64) are now outside the labour market. Neither in work nor looking for work, they are officially labelled as “economically inactive”.

Some of those 9.2 million people are in education, with many students not active in the labour market because they are studying full-time. Others are older workers who have chosen to take early retirement.

But that still leaves a large number who are not part of the labour market because they are unable to work. And one key driver of economic inactivity in recent years has been illness.

This increase in economic inactivity – which has grown since before the pandemic – is not just harming the economy, but also indicative of a deeper health crisis.

For those suffering ill health, there are real constraints on access to work. People with health-limiting conditions cannot just slot into jobs that are available. They need help to address the illnesses they have, and to re-engage with work through organisations offering supportive and healthy work environments.

And for other groups, such as stay-at-home parents, businesses need to offer flexible work arrangements and subsidised childcare to support the transition from economic inactivity into work.

The government has a role to play too. Most obviously, it could increase investment in the NHS. Rising levels of poor health are linked to years of under-investment in the health sector and economic inactivity will not be tackled without more funding.

Carrots and sticks

For the time being though, the UK government appears to prefer an approach which mixes carrots and sticks. In the March 2024 budget, for example, the chancellor cut national insurance by 2p as a way of “making work pay”.

But it is unclear whether small tax changes like this will have any effect on attracting the economically inactive back into work.

Jeremy Hunt also extended free childcare. But again, questions remain over whether this is sufficient to remove barriers to work for those with parental responsibilities. The high cost and lack of availability of childcare remain key weaknesses in the UK economy.

The benefit system meanwhile has been designed to push people into work. Benefits in the UK remain relatively ungenerous and hard to access compared with other rich countries. But labour shortages won’t be solved by simply forcing the economically inactive into work, because not all of them are ready or able to comply.

It is also worth noting that work itself may be a cause of bad health. The notion of “bad work” – work that does not pay enough and is unrewarding in other ways – can lead to economic inactivity.

There is also evidence that as work has become more intensive over recent decades, for some people, work itself has become a health risk.

The pandemic showed us how certain groups of workers (including so-called “essential workers”) suffered more ill health due to their greater exposure to COVID. But there are broader trends towards lower quality work that predate the pandemic, and these trends suggest improving job quality is an important step towards tackling the underlying causes of economic inactivity.

Freedom

Another big section of the economically active population who cannot be ignored are those who have retired early and deliberately left the labour market behind. These are people who want and value – and crucially, can afford – a life without work.

Here, the effects of the pandemic can be seen again. During those years of lockdowns, furlough and remote working, many of us reassessed our relationship with our jobs. Changed attitudes towards work among some (mostly older) workers can explain why they are no longer in the labour market and why they may be unresponsive to job offers of any kind.

Sign on railings supporting NHS staff during pandemic.
COVID made many people reassess their priorities. Alex Yeung/Shutterstock

And maybe it is from this viewpoint that we should ultimately be looking at economic inactivity – that it is actually a sign of progress. That it represents a move towards freedom from the drudgery of work and the ability of some people to live as they wish.

There are utopian visions of the future, for example, which suggest that individual and collective freedom could be dramatically increased by paying people a universal basic income.

In the meantime, for plenty of working age people, economic inactivity is a direct result of ill health and sickness. So it may be that the levels of economic inactivity right now merely show how far we are from being a society which actually supports its citizens’ wellbeing.

David Spencer has received funding from the ESRC.

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Illegal Immigrants Leave US Hospitals With Billions In Unpaid Bills

Illegal Immigrants Leave US Hospitals With Billions In Unpaid Bills

By Autumn Spredemann of The Epoch Times

Tens of thousands of illegal…

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Illegal Immigrants Leave US Hospitals With Billions In Unpaid Bills

By Autumn Spredemann of The Epoch Times

Tens of thousands of illegal immigrants are flooding into U.S. hospitals for treatment and leaving billions in uncompensated health care costs in their wake.

The House Committee on Homeland Security recently released a report illustrating that from the estimated $451 billion in annual costs stemming from the U.S. border crisis, a significant portion is going to health care for illegal immigrants.

With the majority of the illegal immigrant population lacking any kind of medical insurance, hospitals and government welfare programs such as Medicaid are feeling the weight of these unanticipated costs.

Apprehensions of illegal immigrants at the U.S. border have jumped 48 percent since the record in fiscal year 2021 and nearly tripled since fiscal year 2019, according to Customs and Border Protection data.

Last year broke a new record high for illegal border crossings, surpassing more than 3.2 million apprehensions.

And with that sea of humanity comes the need for health care and, in most cases, the inability to pay for it.

In January, CEO of Denver Health Donna Lynne told reporters that 8,000 illegal immigrants made roughly 20,000 visits to the city’s health system in 2023.

The total bill for uncompensated care costs last year to the system totaled $140 million, said Dane Roper, public information officer for Denver Health. More than $10 million of it was attributed to “care for new immigrants,” he told The Epoch Times.

Though the amount of debt assigned to illegal immigrants is a fraction of the total, uncompensated care costs in the Denver Health system have risen dramatically over the past few years.

The total uncompensated costs in 2020 came to $60 million, Mr. Roper said. In 2022, the number doubled, hitting $120 million.

He also said their city hospitals are treating issues such as “respiratory illnesses, GI [gastro-intenstinal] illnesses, dental disease, and some common chronic illnesses such as asthma and diabetes.”

“The perspective we’ve been trying to emphasize all along is that providing healthcare services for an influx of new immigrants who are unable to pay for their care is adding additional strain to an already significant uncompensated care burden,” Mr. Roper said.

He added this is why a local, state, and federal response to the needs of the new illegal immigrant population is “so important.”

Colorado is far from the only state struggling with a trail of unpaid hospital bills.

EMS medics with the Houston Fire Department transport a Mexican woman the hospital in Houston on Aug. 12, 2020. (John Moore/Getty Images)

Dr. Robert Trenschel, CEO of the Yuma Regional Medical Center situated on the Arizona–Mexico border, said on average, illegal immigrants cost up to three times more in human resources to resolve their cases and provide a safe discharge.

“Some [illegal] migrants come with minor ailments, but many of them come in with significant disease,” Dr. Trenschel said during a congressional hearing last year.

“We’ve had migrant patients on dialysis, cardiac catheterization, and in need of heart surgery. Many are very sick.”

He said many illegal immigrants who enter the country and need medical assistance end up staying in the ICU ward for 60 days or more.

A large portion of the patients are pregnant women who’ve had little to no prenatal treatment. This has resulted in an increase in babies being born that require neonatal care for 30 days or longer.

Dr. Trenschel told The Epoch Times last year that illegal immigrants were overrunning healthcare services in his town, leaving the hospital with $26 million in unpaid medical bills in just 12 months.

ER Duty to Care

The Emergency Medical Treatment and Labor Act of 1986 requires that public hospitals participating in Medicare “must medically screen all persons seeking emergency care … regardless of payment method or insurance status.”

The numbers are difficult to gauge as the policy position of the Centers for Medicare & Medicaid Services (CMS) is that it “will not require hospital staff to ask patients directly about their citizenship or immigration status.”

In southern California, again close to the border with Mexico, some hospitals are struggling with an influx of illegal immigrants.

American patients are enduring longer wait times for doctor appointments due to a nursing shortage in the state, two health care professionals told The Epoch Times in January.

A health care worker at a hospital in Southern California, who asked not to be named for fear of losing her job, told The Epoch Times that “the entire health care system is just being bombarded” by a steady stream of illegal immigrants.

“Our healthcare system is so overwhelmed, and then add on top of that tuberculosis, COVID-19, and other diseases from all over the world,” she said.

A Salvadorian man is aided by medical workers after cutting his leg while trying to jump on a truck in Matias Romero, Mexico, on Nov. 2, 2018. (Spencer Platt/Getty Images)

A newly-enacted law in California provides free healthcare for all illegal immigrants residing in the state. The law could cost taxpayers between $3 billion and $6 billion per year, according to recent estimates by state and federal lawmakers.

In New York, where the illegal immigration crisis has manifested most notably beyond the southern border, city and state officials have long been accommodating of illegal immigrants’ healthcare costs.

Since June 2014, when then-mayor Bill de Blasio set up The Task Force on Immigrant Health Care Access, New York City has worked to expand avenues for illegal immigrants to get free health care.

“New York City has a moral duty to ensure that all its residents have meaningful access to needed health care, regardless of their immigration status or ability to pay,” Mr. de Blasio stated in a 2015 report.

The report notes that in 2013, nearly 64 percent of illegal immigrants were uninsured. Since then, tens of thousands of illegal immigrants have settled in the city.

“The uninsured rate for undocumented immigrants is more than three times that of other noncitizens in New York City (20 percent) and more than six times greater than the uninsured rate for the rest of the city (10 percent),” the report states.

The report states that because healthcare providers don’t ask patients about documentation status, the task force lacks “data specific to undocumented patients.”

Some health care providers say a big part of the issue is that without a clear path to insurance or payment for non-emergency services, illegal immigrants are going to the hospital due to a lack of options.

“It’s insane, and it has been for years at this point,” Dana, a Texas emergency room nurse who asked to have her full name omitted, told The Epoch Times.

Working for a major hospital system in the greater Houston area, Dana has seen “a zillion” migrants pass through under her watch with “no end in sight.” She said many who are illegal immigrants arrive with treatable illnesses that require simple antibiotics. “Not a lot of GPs [general practitioners] will see you if you can’t pay and don’t have insurance.”

She said the “undocumented crowd” tends to arrive with a lot of the same conditions. Many find their way to Houston not long after crossing the southern border. Some of the common health issues Dana encounters include dehydration, unhealed fractures, respiratory illnesses, stomach ailments, and pregnancy-related concerns.

“This isn’t a new problem, it’s just worse now,” Dana said.

Emergency room nurses and EMTs tend to patients in hallways at the Houston Methodist The Woodlands Hospital in Houston on Aug. 18, 2021. (Brandon Bell/Getty Images)

Medicaid Factor

One of the main government healthcare resources illegal immigrants use is Medicaid.

All those who don’t qualify for regular Medicaid are eligible for Emergency Medicaid, regardless of immigration status. By doing this, the program helps pay for the cost of uncompensated care bills at qualifying hospitals.

However, some loopholes allow access to the regular Medicaid benefits. “Qualified noncitizens” who haven’t been granted legal status within five years still qualify if they’re listed as a refugee, an asylum seeker, or a Cuban or Haitian national.

Yet the lion’s share of Medicaid usage by illegal immigrants still comes through state-level benefits and emergency medical treatment.

A Congressional report highlighted data from the CMS, which showed total Medicaid costs for “emergency services for undocumented aliens” in fiscal year 2021 surpassed $7 billion, and totaled more than $5 billion in fiscal 2022.

Both years represent a significant spike from the $3 billion in fiscal 2020.

An employee working with Medicaid who asked to be referred to only as Jennifer out of concern for her job, told The Epoch Times that at a state level, it’s easy for an illegal immigrant to access the program benefits.

Jennifer said that when exceptions are sent from states to CMS for approval, “denial is actually super rare. It’s usually always approved.”

She also said it comes as no surprise that many of the states with the highest amount of Medicaid spending are sanctuary states, which tend to have policies and laws that shield illegal immigrants from federal immigration authorities.

Moreover, Jennifer said there are ways for states to get around CMS guidelines. “It’s not easy, but it can and has been done.”

The first generation of illegal immigrants who arrive to the United States tend to be healthy enough to pass any pre-screenings, but Jennifer has observed that the subsequent generations tend to be sicker and require more access to care. If a family is illegally present, they tend to use Emergency Medicaid or nothing at all.

The Epoch Times asked Medicaid Services to provide the most recent data for the total uncompensated care that hospitals have reported. The agency didn’t respond.

Continue reading over at The Epoch Times

Tyler Durden Fri, 03/15/2024 - 09:45

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