news Online DVD rental and Internet media company Quickflix this week revealed a series of senior leadership losses including the representative of investor HBO, as the company continues to burn through cash and seek further funding to continue its operations.
Late last week the company revealed that the President of US cable television giant HBO, which signed a major content licensing deal with Quickflix in January this year, would unexpectedly leave its board. At the time, McGee said in a brief statement that he wished the company the best and that HBO remained a supporter of Quickflix. Subsequently, yesterday Quickfix revealed in a further statement that several other senior executives helping to guide the company would be stepping down. Firstly, Quickflix chief executive Chris Taylor, who only took up the post in July 2011 after leaving Telstra’s Media division to do so, has resigned as the company’s chief executive and will leave in March 2013.
Taylor will be replaced by Quickflix founder and executive chairman Stephen Langsford, but the company will also lose other talent in the form of non-executive director and deputy chairman Justin Milne, who also had a lengthy career at Telstra before joining Quickflix’s board, and non-executive director Susan Hunter, who will step down from Quickflix’s board but remain the company’s secretary.
The news comes as Quickflix has recently inked a number of deals to see its streaming media content distributed through popular platforms such as Microsoft’s Xbox 360 console, and its revenue has simultaneously been growing; in the year ending 30 June 2012, Quickflix pulled in almost $17 million in revenue for the year, compared with close to $11 million the year previously. In addition, the company has rapidly been growing its customer numbers, counting some 111,000 at the end of June this year.
However, the company also continues to suffer increasing losses. In that year, Quickflix lost close to $14 million, up dramatically from a loss of close to $3 million the previous year, with most of the increases coming in the form of marketing, content and distribution and staffing costs. At the end of June 2012, Quickflix had just $15.4 million in total assets, including just $6.8 million in current assets. It had $5.7 million in cash at that point.
In its statement this week, Quickflix wrote: “Quickflix advises that negotiations continue with regard to the future funding of the company. The directors and management are currently pursuing several options and working through a restructuring plan to reduce costs and capital requirements.” The company noted it was likely that Quickflix’s shares would remain suspended until 29 November. The company’s shares are worth 5.6c each.
I have to say that things are looking pretty bleak for Quickflix. The company has lost much of its senior management talent, it’s burning through cash, and even partners like HBO are suddenly looking a lot less committed to its future than they were just a few months ago. It’s a pretty terrible situation for a company which is widely regarded in the technology sector as one of the few in Australia that really understands what consumers want in terms of getting video content out to users over the Internet.
Personally, I think there is a strong case for Quickflix to obtain further lifeline funding somehow. The company’s revenue and customer number growth continues to look strong. If it can keep juggling all of its problems up in the air for two to three more years, those problems may eventually go away. Let’s hope that the company can find enough funding for that happy future to eventuate.
Image credit: Quickflix