Quibi is selling content to Roku

Quibi was the biggest bust of the streaming boom. But it has something Roku wants — more than 100 original programs.

Quibi, which announced that it was closing six months after a much-hyped introduction, is in talks to sell its content to Roku, the streaming device maker with a streaming app of its own.

The deal is close to completion, said one person with knowledge of the discussions, who was not authorized to speak publicly. Quibi and Roku declined to comment.

Started 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. Its shows, chopped into installments no longer than 10 minutes, were meant to be watched on smartphones.

The approach assumed that people wanted this kind of viewing experience to help them through their daily commutes or while they were in line for coffee, but the coronavirus pandemic meant that potential customers were out of their on-the-go workday routines when the platform went live in April.

Mr. Katzenberg blamed the pandemic for Quibi’s quick downfall, while others cited its unusual format and some of its creative choices, including a show starring the Emmy-winning actress Rachel Brosnahan as a character obsessed with her own golden arm.

Still, Quibi won two Emmy Awards in the short-form category, for the actors Laurence Fishburne and Jasmine Cephas Jones in the series “#FreeRayshawn.” Two of its other shows scored nominations: “Most Dangerous Game,” which starred Christoph Waltz and Liam Hemsworth, and a reboot of the comedy “Reno 911!”

That’s 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 go unseen.

Complicating the talks, which were first reported by The Wall Street Journal, is Quibi’s unusual business strategy. Mr. Katzenberg and Ms. Whitman didn’t pursue ownership of the platform’s content, instead buying exclusive rights from 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.

Roku, known primarily for its easy-to-use streaming devices, generates almost two-thirds of its revenue from its media division. Roku TV, a free, ad-supported streaming channel, offers movies and shows made by other companies, without a significant lineup of its own original content.

Despite the relatively low cost of digital platforms, streaming bills are starting to add up as the digital media industry matures and expands. The average household pays for only three services at a time, and exclusive content on a free app is likely to attract an audience.

The latest entrant, Discovery+, a platform built on 55,000 hours of unscripted shows, went live on Monday, arriving in the wake of Peacock from NBCUniversal, HBO Max, Disney+, AppleTV+, Paramount+ and Hulu — all ambitious streaming services now playing catch-up with Netflix.

Roku has become a streaming force by exercising its distribution power — it claims 46 million accounts — to lift its media business. After a long disagreement, Roku recently forged a deal with AT&T to carry its HBO Max service. Roku wanted more access to advertising inventory on AT&T’s forthcoming ad-based streaming platform as well as rights to Warner Bros. content.