"The world has changed dramatically since Quibi launched and our standalone business model is no longer viable."
Katzenberg reportedly tried to sell the startup's catalogue of programmes to companies including NBCUniversal and Facebook without success.
The streaming service has more than 100 original series spanning a range of genres with episodes specifically designed for viewing on smartphones and lasting no more than 10 minutes each, according to the startup.
"We have assembled a world-class creative and engineering team that has created an original platform fueled by groundbreaking technology and IP, enabling consumers to view premium content in a whole new way," Katzenberg said.
Quibi now plans to wind down operations and sell off its assets.
The fledgling platform scored 10 Emmy nominations including for cop spoof revival Reno 911! and dystopian thriller Most Dangerous Game including two Emmy wins for actors in "#FreeRayshawn."
Hollywood stars committed to work with Quibi thanks to Katzenberg, a towering figure in Tinseltown who ran Disney Studios for a decade and co-founded DreamWorks.
Quibi had also hoped to keep users coming back with daily news, sports and entertainment shows.
"Quibi was a big idea and there was no one who wanted to make a success of it more than we did," Katzenberg and Quibi chief executive Meg Whitman said in a letter to its employees posted on Medium.
"Our failure was not for lack of trying; we've considered and exhausted every option available to us."
Taking on titans
While Quibi specialised in short-form shows to watch during spare minutes of the day, say waiting for transit or taking a break at work, people who hunkered down at home due to the coronavirus pandemic found time for big-screen options in an increasingly competitive streaming television market.