Telstra shutters online DVD rental arm

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Telstra has revealed plans to shut down its long-running online DVD rental service, with customers to be referred instead to rival service Quickflix.

Last week the telco posed a message on its site for the service, stating that “technology improvements” meant that it could now deliver movies directly to consumers’ homes through broadband, instead of sending them a physical DVD. Telstra has been offering online movie downloads for some years, but has recently enhanced its services in the area, with the launch of its T-Box set-top box.

The telco’s online DVDs service was set up more than half a decade ago, as a wave of enthusiasm for similar services took off in Australia. The largest local player in the space is believed to be Quickflix, but Telstra’s service, as well as a competing service from online giant ninemsn, had also garnered substantial audiences. However, Quickflix, which is listed on the Australian Stock Exchange, appears to be one of the only such services still to survive.

In a statement to the ASX today (PDF), Quickflix revealed it had entered into an agreement with Telstra, which will see Telstra refer BigPond Movies DVD customers who wish to maintain an online DVD rental service to Quickflix, following the termination of Telstra’s own service on 30 September.

Quickflix will in turn make a variable payment to Telstra based on the number of customers who transfer across; as well as acquiring BigPond’s library of DVD and Blu-ray discs and equipment.

“We are delighted to enter this agreement with Telstra and look forward to delivering a great service for BigPond Movies DVD customers who choose to continue with DVD rental,” said Quickflix executive chairman Stephen Langsford. “As a result of this agreement, we will significantly increase the depth of our library of latest release and catalogue titles, and we’ll be servicing the whole of Australia with next day delivery in all major cities.”

Telstra admitted last week that the movie download service offered through its T-Box platform was “not as comprehensive” as had been available through its DVD rental service — with about 2,500 titles being available online, compared with the 44,000-odd DVDs which Telstra had owned. However, the telco is adding to its online portfolio on a regular basis.

Quickflix itself appears to be benefiting greatly from the closure of rival services. In April this year, the company revealed that its numbers of paying subscribers had grown by over 12,000 during the preceding quarter, reaching a total of 64,204. Revenues also increased by 24 percent, reaching $3.32 million.

However, the company faces significant new competition in the online movie delivery space; with telcos such as Telstra pushing hard into the area and smaller ISPs like iiNet and Internode also launching online video on demand and IPTV platforms.

Image credit: Quickflix

10 COMMENTS

  1. “The largest local player in the space is believed to be Quickflix, but Telstra‚Äôs service, as well as a competing service from online giant ninemsn.”

    There seems to be something missing from the end of this sentence.

  2. “a total of $64,204”

    .. I think that’s a typo. Unless they really do see all their customers as just a $ figure ;)

  3. Until somebody can beat my local DVD rental’s $1 Tuesday AND supply a sizable selection of good foreign films… I just don’t care.

  4. Congrats to Quickflix .. although this whole sector is a good case study in that some ideas don’t travel quite as well as you might expect. Netflix has gone gangbusters in the states, as has redbox with DVD vending machines. Yet here, Quickflix at 6 years down still isn’t cashflow positive and vending machines have had a lukewarm reception. Admittedly Quickflix, Bigpondmovies and previously Homescreen have had a tough tussle head-to-head (Netflix created it’s own space) and now with BP gone, perhaps Quickflix will get the traction it needs. The spoils come to the survivor and Quickflix has outlasted them all!

  5. People don’t want DVDs in the mail. They want to stream video/tv on demand through their TV.

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