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  • Gadgets, Internet, News - Written by on Wednesday, November 21, 2012 13:58 - 22 Comments

    Quickflix leadership decimated as losses mount

    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.

    opinion/analysis
    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

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    22 Comments

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    1. Posted 21/11/2012 at 2:01 pm | Permalink |

      “really understands what consumers want in terms of getting video content out to users over the Internet”

      Not convinced. If they want it, they’d be grabbing it, and they shouldn’t be burning through cash. This is a “not enough people know and/or care” to sustain it.

      Great idea, but non-compatible marketplace right now.

      • PointZeroOne
        Posted 21/11/2012 at 2:06 pm | Permalink |

        The lack of quality internet connections is really hurting the streaming part of the business I’d say.

        We have a quickflix account and get blurays sent out, but the not knowing what is being sent out next is really annoying.

        • Posted 21/11/2012 at 2:41 pm | Permalink |

          “The lack of quality internet connections is really hurting the streaming part of the business I’d say.”

          Streaming is pretty much a no-go for my household on a 4.5Mbit connection. Given decent speeds on my connection (and product on their side – it really needs to be a mirror of content available in the US but that’s a hurdle no Australian company is going to be able to overcome in the immediate future) I would be all over this.

          My friends in the US absolutely love Netflix. :(

        • Posted 21/11/2012 at 2:46 pm | Permalink |

          I used to have DVDs sent out but we didn’t watch enough to warrant the cost, pay for online streaming now but that’s only because it’s convenient for throwing on a kids but even that is getting questionable now I’ve ripped most of my DVDs and and just stream straight from a media server. If I want to add a new movie just buy the DVD, rip it, done.

          On the streaming thing though I just don’t get why QF do what they do. They limit the number of devices that connect at a time but they don’t do it on login count, they do based on registering a device. Then to take that device off you have to deregister it, but if you deregister it too many times you’ve got to call them so they can allow you to register it again.

          It would be far better to not do 5 registered devices and limit the number of active logins to say 2 or 3, that would mean it wouldn’t matter what machine you’re so long as you’ve got an available login you can use it, and it would mean it operates the same as every other paid streaming site I’ve ever used.

        • Posted 23/11/2012 at 9:15 am | Permalink |

          “The lack of quality internet connections is really hurting the streaming part of the business I’d say.”
          “non-compatible marketplace right now.”

          Yes… :)

    2. Posted 21/11/2012 at 2:12 pm | Permalink |

      In the USA, Netflix is the number one consumer of Internet bandwidth. Here, in comparison, the closest thing we have is dying. Obviously, I am only in a position to speculate on the why, but as someone who registered with Quickflix online only to see I can download Lethal Weapon I can sort of get the picture.
      Yet another “victory” for the content industry’s old business model.

      • Quasar
        Posted 24/11/2012 at 8:24 pm | Permalink |

        Its just convinced me to close my account and sign up with netflix. Which works perfectly fine.

    3. doubter
      Posted 21/11/2012 at 2:15 pm | Permalink |

      Netflix had a hugley successful DVD rental business, very profitble and spitting out huge amounts of cash – then they launched their streaming business. Quickflix never made a dime from their core DVD business, always promising they would next year or next quarter – and then hired dozens of high paid execs and launched the streaming product. All they have manged to do is burn through huge amounts of cash…………they wouldn’t have been out of place int he 2000 dot com bust.

    4. Posted 21/11/2012 at 2:20 pm | Permalink |

      Too expensive for too little content. The high month fee for streaming is way too high and I don’t care for waiting for DVD’s in the mail.

      Does not offer anything that we cannot get already for less.

      Have to stream from my laptop and can’t from Boxee or Apple TV.

      Whatever the struggles are in doing so, they aren’t where they need to be and are certainly not where the market who is desperate for Netflix in Australia current is.

    5. Soth
      Posted 21/11/2012 at 3:19 pm | Permalink |

      Yeah we tried it at home, was a bit of a hassle with waiting for 30+ minutes for it to get enough download done so we could watch it without buffering during the movie.
      Still quicker for me to go down the road and rent the DVD from the shop :|

    6. Riley
      Posted 21/11/2012 at 4:12 pm | Permalink |

      I tried QuickFlix and the first dvd I returned to them was never received and I got nothing but grief so I didn’t continue with the service. I looked at their streaming service on my PS3 and through that their prices were too high to consider.

      Now going through a private VPN and getting Netflix streamed from the US – all up it costs $10 a month and the content they have is amazing – no looking back at all!

      • Rhys
        Posted 22/11/2012 at 8:40 am | Permalink |

        “Now going through a private VPN and getting Netflix streamed from the US – all up it costs $10 a month and the content they have is amazing – no looking back at all!”

        By far the biggest threat to Quickflix is the above. And I know which deal I’ll be getting.

    7. Posted 21/11/2012 at 9:12 pm | Permalink |

      3 issues:

      - Australia’s average downloads too slow
      - The streaming selection is APPALLING (all of 400 titles- even Bigpond is better…)
      - NO movement by copyright holders to move to this type of market in Australia- they are stubbornly refusing here.

      If we lose QuickFlix, we’ll see streaming services in Australia go backwards for a few years….couple that with a loss of the NBN….goodbye economic growth since the miners have slowed….

    8. mash
      Posted 22/11/2012 at 10:21 am | Permalink |

      I wonder how much revenue/losses comes from the DVD rental part of the business? Then I wonder what it would do for their expenses if they just completely dumped it (which of course has to happen some time).

      • Posted 22/11/2012 at 10:25 am | Permalink |

        @mash

        Actually, their DVD rental part is the par that makes the money I believe….

        The copyright licenses to stream movies is ludicrously expensive here.

        • mash
          Posted 22/11/2012 at 11:00 am | Permalink |

          “Actually, their DVD rental part is the par that makes the money I believe”

          And trending downwards soon no doubt?

          So does licensing costs mean only the really big players can provide streaming profitably? With other players queueing up to provide this service surely this will change soon?

          • Posted 22/11/2012 at 2:08 pm | Permalink |

            I think with membership of 112,000, compared to old-school local stores holding 3,000,000 members Australia wide (1,000 stores x 3,000 members each) – even as those numbers decline – if Quickflix can transfer local store members to their business, their DVD revenue will only be on the up for the next 5 years at least. This is what drove Netflix’s rise. However Quickflix’s pursuit of streaming has ignored their core revenue stream and they’ve lost focus IMO.

            As noticed earlier they are pursuing a ‘non-compatible marketplace right now.’ This is a classic question of product-market fit. The feeling that streaming is the inevitable outcome for movie delivery that everyone will want doesn’t address the dynamics of the market today.

    9. Posted 22/11/2012 at 11:22 am | Permalink |

      Whilst we are sticking the boot in… the number of DVDs I get from Quickflix that are unwatchable due to scratches, etc is quite concerning. Maybe the Xbox 360 is an overly sensitive (not to mention noisy) DVD player, but its still quite annoying…

      • PointZeroOne
        Posted 22/11/2012 at 3:08 pm | Permalink |

        Yeah we’ve found that as well, seems like every 3rd disc stops playing at some point.

    10. Karl
      Posted 23/11/2012 at 8:11 am | Permalink |

      Unblock us and netflix for around 11 bucks per month here. Quickcrap is pathetic.

    11. Stephen H
      Posted 23/11/2012 at 12:11 pm | Permalink |

      Quickflix has no content. I thought about signing up for 6 weeks free that came with a Kogan Smart TV dongle, but the streaming stuff is just rubbish. Plus a quick web search suggested that once you were on their books they hung on for dear life – I don’t want to deal with a company that won’t take no for an answer.

      Of course, fatter internet would help and the NBN will certainly allow for better online delivery – if the content owners are prepared to sell their content at a reasonable price.

    12. Vijay V
      Posted 03/12/2012 at 9:04 pm | Permalink |

      Netflix + Unblock-Us is just brilliant. I can stream through my PS3 (with a US PSN account) direct to my Sony TV plus watch on my PC at the same time. Why would I get anything else?

      I even disconnected Foxtel and I am not missing anything. All the sports I watch are on FTA.

      Quickflix content is boring and costs too much.




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