Quickflix Attacks Netflix: 'Play By The Rules'

Stephen Langsford, CEO of Australian DVD rental and video on demand streaming service Quickflix, has hit out at international competitor and current streaming king Netflix, saying that the US video on demand giant should play by Australian rules and therefore block access to its estimated 200,000 current Australian subscribers, who are accessing Netflix through a method of uncertain legality.

Disclosure: Campbell Simpson previously owned shares in Quickflix (ASX:QFX).

The one-page letter, reproduced in full below, is upfront in its attitude: "If you want to compete in Australia, come in through the front door." Langsford and Quickflix are fighting against a company that is not playing on a level playing field — Netflix does not operate an official service for Australian customers and does not hold the rights to distribute its licensed content in Australia, and Aussies that access the service do so through various geoblocking circumvention tools like VPNs and DNS unblockers.

The letter says Netflix is getting a "free ride", taking away revenue from "local services" (that'd be Quickflix). It also says that if Netflix continues to "filch revenues", competition from Quickflix and other local services will be unviable and Aussies will "suffer in the long run with fewer choices, less compelling offerings and higher prices." It isn't immediately clear how continued illegitimate access to Netflix will raise prices for Australian users, though.

"So Mr Hastings, we challenge Netflix to play by the rules. It's how we do it here in Australia." The argument is mostly emotional, and is likely tailored to tug heartstrings rather than present reasoning that will sway existing Aussie Netflix subscribers from continuing their plans.

In the letter, Quickflix says it has almost half a million devices registered to access its online streaming service. Quickflix's just-released annual report says the company has 122,682 paying Australian customers, around 60 per cent of Netflix's established Australian user-base (according to vague estimates).

According to similarly brand new research from (allegedly) independent group IHS Technology and the Australian Home Entertainment Distributors Association, Australia is the cheapest place in the world to watch SD and HD video on demand, with average prices of $5.19 per HD movie and $4.25 per SD movie across 36 digital platforms. This research, though, very clearly does not take into account the all-you-can-eat nature of services like Netflix and Quickflix that offer tens of thousands of movies for a monthly flat rate.

The local streaming service will also face strong local competition from StreamCo, the imminent video on demand offering from a partnership between Nine Entertainment Co and Fairfax Media. StreamCo is a $100 million venture to capture Australian streaming viewers, and a competitor to the already-launched Presto of Foxtel and Seven West Media.

Quickflix also released a fact sheet on the difference between the two companies. Of particular interest is the fact that Quickflix subscriptions include access to HBO TV series where Netflix does not — in the US, HBO is a competitor to Netflix. It is, however, apparently considering offering its HBO GO online service without a mandatory bundled cable television subscription. The base price of Quickflix versus Netflix plus a VPN is also compared — $9.99 versus $15.70 — but does not take into account free services like Hola or free VPNs.

Let's be clear: to the best of my knowledge, there is nothing obviously illegal about accessing Netflix from Australia — 'obviously' being used in the legal sense. It is definitely of dubious and uncertain legality, though, because Section 10 of the Copyright Act 1968 makes it an offence to circumvent an access control technological protection measure which is in place to protect copyright. Because case law has not been established and tested in the particular circumstance of VPNs, the legal community is split on whether geoblocking is a protection measure in the strictest sense.

In any case, there is a moral argument that Australian citizens should be paying local rightsholders for the rights to access copyrighted materials, and this is the argument that Quickflix is making today. Whether Netflix takes any notice, and whether Netflix's Australian users take any notice, is another question entirely. [Quickflix]


Comments

    $7 for a VPN? I pay getflix $2.45 a month.

    Where's the column that lists "HD" and "Surround Sound" ? eh Quickflix?

    And they're wrong about not being available on game consoles etc. I watch netflix on my PS3. You can get the app for your phone too. Its available on Apple TVs too. You just have to create US accounts on these devices.

    Number of concurrent streams...eh Netflix base is 2 devices can stream at the same time. Pay a little extra and 4 devices can stream at the same time.

    So many things wrong with that #FACTS sheet.

    Last edited 16/09/14 9:48 am

      They did qualify it with "local", we do have to region hop to download the app :p.

      Hey quickflix, try not sucking, then I'll check you out. In the meantime I'm watching things in HD via Netflix and Hulu Plus. Also you have to actively downgrade your Netflix to 1 stream per month, default is 3.

      If US services stop accepting AU credit cards, I'll just get an international credit card. I'm not going to pay more for a crappier product just because the locals bleated to the government hard enough. Make a compelling product, then you can nab me. I don't region hop for music streaming, there's very little benefit and it's easier to stay local, but video streaming is a joke in this country.

        I've said this a million times.... the Games and Music industry has for the most part successfully adapted to the changing environment.
        Netflix is by far the best option out there at the moment but it's not perfect either. They are the first step in pushing the film and TV industry into this century kicking and screaming.

          The Pilates Bay is still much easier than having to deal with proxies and streaming and buffering

          I pay for my content from all the apple product placements i have to sit through during every tv show

          (even if you put a stick or a phone cover over it. I still know youre using a damn apple product)

          except hawaii five-0. In which case i welcome every awkward Surface Pro usage scenario scene.

          Seriously though. Somebody release a legal bittorrent system, id pay for that

          Last edited 16/09/14 11:48 am

            Torrenting is legal. It's only part of it which is used for nefarious purposes.

              i meant if Fox released official tv episodes in HD via bittorrent on a private tracker

              Last edited 17/09/14 2:11 pm

        Exactly, I did pay for quickflix, but the service was in a word, shithouse.
        I only went looking for netflix because the quickflix quality was so bad it made youtube look good.
        If you can't stream me movies *in Australia* in quality as good as a stream coming from US servers, then you are not offering a good service.

      As with all "facts" it's selective.
      You can use Hola Unblocker for free. I've also noticed that I can stream more than 1 device so that's clearly wrong.

      Just because Quickflix has a whole bunch of "premium" extra stuff doesn't make it better... it all costs more money.

      $2.45 for a VPN? I use the Hola Chrome extension for free.

        yeah but you can't use that on a PS3 or other devices can you? ;)

          Pretty sure PS3 can use unblock-us DNS just as easily as other devices.

            Obviously. I was replying to the above comment that said he uses Hola for Chrome. You can't use that for PS3/devices. Hence why I use getflix, which I stated in the OP.

          Don't need to. I have a PC connected to my TV :)

        THANK YOU INTERNET NINJA!

    Been there, Seen the substandard UI/Crappy Offerings and i was not impressed. Ill stick to my current grey area setup where i can watch what i feel like watching (80% of the time compared to QF's 20%).

      Not to mention constant dropouts on Quickflixs while netflix never drops even after binging a whole tv show seasson.

        I have had issues when streaming it on my Surface, but that's more of a Microsoft Silverlight issues than anything

    A message to the hundreds of thousands of Netflix users in Australia - Quickflix wants to destroy your access the the content you want at reasonable prices. You know what to do to Quickflix don't you?

      Sadly, it's hard to blame Quickflix too much here. It's the content owners that demand geoblocking, and who won't sell international streaming licences. Quickflix has no legal choice but to pay the content owners whatever they want, for anything they feel like selling. That's why it has such limited content.

      I can imagine them feeling bitter, when they're stuck with paying AU licence fees for a much smaller library, while Netflix gets the far sweeter US deal but still collects the AU customers. But of course, the source of the problem is the content owners wanting every country to pay individually, at whatever they think the market might bear.

        No, it's not hard to blame Quickflix. Anyone in Australia can bypass geoblocking to pay for (rewarding the content creator) and access whatever they want to, like anybody else in the world. The content owners are irrelevant, we can get their content and pay the same for it as a US citizen whenever we like. Quickflix want to take that away from you!!! Of course Quickflix should be blamed, they want to destroy your ability to pay for and get want you want and siphon money from YOUR pocket. Why on Earth would anybody defend the robbers at Quickflix??

      Agreed

    Instead of Foxtel and Quickflix bashing on Netflix and wasting all this time and money trying to convince people their services are better, why don't they take the time to look at their services and see how they could improve on their services. All this bashing is doing more damage to them than it is Netflix.

      This is typical of so many businesses. Instead of stopping to take the time and look at what they're doing wrong, they do everything imaginable to avoid admitting fault.

      It's never their fault that their company isn't what people want. The sooner businesses learn that customers aren't stupid, and that they will hunt the best deal possible, the better.

      I'm still strongly under the opinion that if Netflix legitimately moves to Aus, I'll probably continue with the US workaround.

        I'd much rather pay for a local service IF it was as good as Netflix. If it's not as easy to use and doesn't have a similar level of media available then forget it. Using a VPN is kind of annoying but not THAT annoying.

      It's pretty much free advertising to Netflix. I wouldn't be surprised if they saw an extra 100,000 Australians in the last few months because all these idiotic Australian companies are jumping up and down to the point Fairfax are now running articles on how to bypass geoblocks.

        Those articles won't be run by News Ltd any time soon. The Australian actually ran an article earlier this year claiming that anyone who uses VPNs to get Netflix is a pirate, acting illegally. WTF, Rupert?

        Unfortunately, with Rupe's ownership of the current government (in fact, all recent Australian governments) we may actually see laws changed to help him out. Watch this oh-so-secretive TPP space.

        This shutting down of alternatives fits in nicely with the government's mantra about competition, and keeping out of the way of business, doesn't it?

      Because that would require more effort on their behalf?

      Have to agree there. Look at Foxtel play/go. Utter and complete rubbish, crap. Hard to make it work, low quality. If Foxtel play was up to Netflix picture/app quality, a reasonable price and Sport was available for 25 bucks standalone, they would sign up 100,000's in months!

      Agreed - Foxtel and Quickflix should be using the current situation to improve their negotiations with content suppliers. If you cannot supply Aus licencing expediently and at a reasonable price for our consumers, we may just feel a little less inclined to be your international police force and push our government so hard to reduce piracy.

    Why is there Geo blocking. It should be made illegal and its the very opposite to the theory of free market.

      Because then they wouldn't be able to price gouge us. Couldn't have that now, could we.

      the only reason geoblocking exists is because movie studios and distributors give out regional licenses.

      I agree, Australia has a free trade agreement in place with the US. So where's the freedom?

        We're signing it away with the Trans-Pacific Partnership agreement.

    Getflix costs me $1.92 per month, Netflix cost me on average the last two months $8.85. I was considering switching to Quickflix, I downloaded the app on my PS4 and browsed through the entire range of items included in their monthly costs, everything, and was shocked at how little it offered. I would switch in a heartbeat to support local, but the content is just too lacking.

    As mentioned by others, streaming to one device only is not correct.

      getflix is $1.92 im paying $4.95 for unlocator time to switch. Thanks :)

        You need to LIKE their FB page, and then pay for 12 months via CC, even then I think the price went up a little a few months ago, but all prices were locked for those already signed up.
        See this - https://www.ozbargain.com.au/node/144333

    Quickflix just trying to justify their existence here. Where is the column for producing their own original content as well?

    If Quickflix offered a better service, we would see thousands of overseas consumers accessing it using a 'back door' to Australia, but no you don't see that. Let's not improve the service, let's force all local consumers to get an inferior service and call it level playing field.

    If the Netflix product is better, then we should be able to access it. But I would like to see the ATO get involved and tax Netflix on the proportion of their profits made here down under, but there's probably a clause in AUSFTA specifically prohibiting this.

      That's also a really good way to piss off Netflix and they would probably tighten up geoblocking, so you most definitely do NOT want that.

    My biggest issue with Quickflix is that you pay a sub fee and only a small amount of old movies and tv are available, most of the stuff you would actually want is an addition charge.

    If they can get it all within the subscription model that would be good, maybe offer 1-2 free premium movies per month or something.

    If Quickflix was so good why dont people switch?

    Suck it Stephen your product is not good enough that people can be bothered finding out how to configure their routers.

    As I've mentioned in LH this morning, HD content on Quickflix is a bloody joke... Even with a 25mps NBN connection there are issues with buffering and dropouts..! Bloody joke all round..!!

      I got a 3 month free trial of Quickflix sometime last year through my ISP and tried it on my ipad and ps3 at the time and everything was unwatchable in SD!! not even HD it was so damn slow. Meanwhile a hd torrent can be done in a few minutes at 1mb/s+ hmm

      Also the lack of content was awful. Sorry quickflix not worth the money you charge.

      Last edited 16/09/14 11:16 am

    Quickflix, if you can get The Walking Dead, Game of Thrones and Boardwalk Empire as they air included in your subscription and I will pay for it. However, it must be in HD (720p as the minimum), in surround sound (5.1 as the minimum) and on as many of the following: Apple TV, Chromecast, iOS, Android, Sony Bravia Smart TV and/or Web Client.

    Heck, if you get an unmetering deal with the major local ISPs and I'll pay for whatever you have right now.

      Just find an unlimited ISP if you want to be unmetered.

      Jiva (iiNet) or TPG are good options if you can get them.

      Or ClubTelco if you are stuck on Telstra's infrastructure.

    I love how these letters are all about how disadvantaged a company is in Australia - but doesn't focus on the most important aspect - the customer!

    If Quickflix want to really justify their argument then they should be doing it from the customer value aspect and not focused on their reduced revenues. Based on their pricing, it would appear that Quickflix is actually cheaper than Netflix so the fundamental question is why is this happening? The consumer is the ultimate authority in the decision making process and it seems the consumer like Netflix for a reason. Maybe that's that Quickflix need to work out and fix?

    Instead of attacking Netflix... Why don't these Australian companies start attacking the wholesaler that sells them the local content licenses?
    Perhaps if they get that cheaper, they can start being competitive with the likes of Netflix?

    That way they don't have to fear running at a loss.

    That being said, if they did do that, they'd still probably charge the same and pocket the extra $$ as pure profit win :\

      Yeah, they seem to be missing the point that the local distributors are the middlemen who are hurting their business. And, as usual, a huge part of the problem is everyone's favorite band of douchebags, Village Roadshow.

      See also: foxtel

    LOL, nobody uses a VPN for Netflix anymore. And $7? Ha. Can't stop the signal!

    How about Quickflix shut up and improve their service, rather than bitching about competition?

    Also, not illegal.

      I use a VPN (Private Internet Access) - should I not? It's only $3.33 a month and it's easy enough for me to use (right-click, choose country). Is there any advantage of using other services? It's fast enough for me to watch in HD :)

    I do somewhat feel for some of these local distribution services that have to pay high prices for the content licenses. But that is a problem that needs to be sorted/worked through and changed from their end.
    You can't blame the consumers for looking for a better deal because you're getting screwed by copyright holders and their ridiculous high prices.

    It still doesn't explain why Quickflix and Presto fail in HD delivery where Netflix does it with ease. I'm guessing Netflix has invested good money in their research and compression technology.

    I signed up to Quickflix once. I then realised how bad it was. There was no content that I wanted to watch so I stuck with Netflix. This just highlights the content supply issue in Australia which is dominated by the overpriced Foxtel offering. Foxtel buy up all of the good stuff, make sure that they have exclusive rights so that no-one else can show anything and then force the little guys like Quickflix to have no content available.

    I've said it before that this issue isn't going to go away until the government steps in and regulates "exclusivity" purchases so that:
    1) TV Shows can only be exclusive to a content distributor for a week after the release of each episode.
    2) Movies can only be exclusive to a content distributor for a month after their release.

    This would ensure cheaper prices for the distributors as they will not want to pay such high prices for content which everyone else will be able to show a short time later, which will in turn encourage the producers of the media to sell their content to other providers so that they can get decent content within an acceptable time frame. The producers get their money and we get out content in a timely fashion.

    "Available legally in Australia"
    Also the term "Legal" used by Quickflix is inaccurate. It is not illegal for us to get access to content on Netflix. It is against Netflix's terms and conditions, but not illegal. It's technically not illegal for Netflix to provide content to a US registered IP address either.

      The legal part is semantics... Is it illegal to breach the terms of use? Technically yes. It's not a "criminal" offense but any breach of contract is cause for legal action.
      Same goes for Netflix providing content outside the US... it will be in breach of their licenses and thus in breach of their contracts with the distributors/suppliers.

      None of this is stuff you can go to jail for but they are basically contractual obligations.

        Nope, still not _illegal_ to breach terms and conditions. It just means they can choose to not provide you the service.

          what does the word "illegal" mean?
          Contrary to law.
          Technically a contract or terms and conditions are legally biding documents. You sign/accept them when you want to use that service.

          Just because you can't get put in jail for it doesn't mean it's not illegal. You can still be sued/fined or in this case have your service stopped

          still technically illegal.

            No. That would mean that any organisation could just write whatever they want in their terms and conditions ("you may only use this service while wearing a freshly ironed blue t-shirt") and those terms would then be treated as law? No. It would simply be against the terms of the service. No laws are being broken because that clause is not a law. Simple.

            Breach of terms and conditions = not contrary to law, unless the T&C state _actual laws_, not made up ones.

              You seem to not understand that a legally binding document is law.
              that's why it's called "legally binding".
              An agreement written in tomato sauce on a napkin can be legally binding.

              There's nothing stopping any organisation doing exactly what you've described. Again... it's not a CRIMINAL law but if you agree to the terms then you are legally bound to the conditions therein.

              Terms and Conditions are a form of contract which is governed by Australian Contract Law
              http://en.wikipedia.org/wiki/Australian_contract_law

              obviously the Netflix ones are governed by US law (Delaware to be exact, it says so in the terms) so that makes it even more of a gray area for us in Australia because you're probably not in breach of any Australian Laws but you're still technically breaching a US contract (and Netflix is breaching theirs, though the excuse would be that they geo-block and people bypass their protection).

                Gotta agree with grantguest. You aren't breaking any Australian laws so how can it be illegal. Our attorney general even said it was ok to get around geoblocking....so it's effectively been given a stamp of approval hasn't it?

                You also can't write whatever you want into a contract and it becomes legally binding. There are laws governing that as well. (probably mentions it in your like above) like the fact you can't sign away your legal rights. So plenty of T&C documents are just rubbish.

                  Which is why it all comes back to what the word "illegal" means. You'll notice that's my first sentence in this whole debate.
                  Basically it's illegal from the US point of view but not from an Australian point of view.... simply because these laws weren't written to transcend borders.

                  I think you'll find that if it was something serious enough, a breach of contract could still result in a summons to a US court even if you don't live in the US. I'm sure it's happened before and is probably quite common in the business world.

                  We were also discussing if it's illegal for Netflix to supply the service to us, which it most definitely is, except the blame is with us not them because they enforce geo-blocking.

                Illegal, and legally binding do not mean what you think it means.

                First, a legally binding contract is not law even if it is enforceable under Australian Contract Law or another law.

                Being in breach of a legally binding contract does not mean that what you've done is illegal because, again, the contract is not law.

                Something is illegal when it is explicitly legislated against, i.e. an actual law exists, a contract is not a law even if it is legally binding and you cross your heart and hope to die.

      It's illegal; you're committing copyright violation.

      The series are licensed to Netflix for distribution in the USA. Any distribution outside of that territory falls outside the licence granted to them and is therefore in breach of copyright. Breach of copyright is illegal (although the penalties for an individual infringer are fairly mild). Ergo watching Netflix from a territory where they're not licensed to distribute is illegal.

      You'll notice that this has nothing to do with your contract with Netflix. For copyright, you either have a licence or you don't. If you watch via a distributor who is legally licensed for your territory, they have licensed rights to show you that material. If they're not licensed for your territory, they do not have the right to show you that material, and both you and they are in breach.

      This is saying nothing about the morality of the situation; IMO you paid to see it, you should be allowed to watch it. That doesn't make it legal. It is exactly as illegal as streaming the show from a pirated site - there is no right to redistribute.

      Contract law doesn't matter in this. Copyright and contract law are two different things. A contract can grant a licence, but in the absence of that licence viewing/copying that material is not legal.

    If they have half a million devices connected but only 122,682 paying customers, does that mean each customer has 4.5 devices to watch it on?
    I guess a couple would have a PC, TV/Console and 2 phones but it seems like a very high average...

    He's joking right? I mean you seriously can't be that naive not to see there is justification for why Australian's use a VPN and give Netflix $8.70USD per month.

    Also asking to enable geo-filtering pretty much implies that he think's VPN's are illegal, last I checked they are used for "real" illegal activities not just streaming content from other countries.

    Pull your head in Quickflix and open your eyes, you have absolutely no competition with Netflix, they are beating you in every regard.

    Someone should make one of these graphics showing how shit Quickflix is and post. Then we can all share it all over social media.

    Quickflix attacking Netflix is just plain stupidity - they are only hurting themselves and all it does is make Aussies hate Quickflix for trying to take away their decent setup then mocking them by saying - join us instead.

    This is like the equivalent to buying a Linux PC - An apple store guy comes in and takes away your PC "because its not legal" - when it is, then offering you sell you an expensive mac to replace it, your going to tell them to go away and you would never touch their product.... This is what Quickflix is doing and again its plain stupid and will only lose them customers.

      How is Linux not legal? Or why would they think that?

      Last edited 17/09/14 12:32 pm

        It was purely a make-believe example of the idiocracy behind this attack. - Quickflix is trying to make out Aussies are breaking the laws by bypassing Quickflix when there is a better alternative.

    Quickflix (which has burnt through $50+ million and NEVER made a profit) just wants Netflix to buy it, thats what this is all about.

    Quickflix are just trying to draw Netflix's attention (again) by attacking them in an "open letter" in the press.

    Last edited 16/09/14 11:34 am

      Why on earth would Netflix want to buy Quickflix? A service that has a minimal customer base, making massive losses, and that nobody actually likes?

      They would be far more likely to launch officially in Australia and simply crush them.

        Exactly, Netflix wouldn't want to buy Quickflix, but Quickflix desperately wants Netflix to buy them. Its their only exit, and always has been since Netflix started. But as Channel Nine/Fairfax "Streamco" now owns a piece of Quickflix, so can block any takeover anyway, so they are screwed both ways.

        Quickflix doesn't need to buy them. Like you say they can just officially launch here and crush them.

    Wow. This makes me angry.

    Entertainment in the digital age is in a different category than shoes, or jeans, or perfume.
    For better or worse, people have such an insatiable desire for entertainment, it practically becomes a psychological necessity. As these comments show, people will not put up with less than our American friends have access to anymore. At least, not the type of tech-savvy customer who is comfortable using a VPN service to access entertainment.

    Sometimes it feels as if our fragmented market is ruined - too many small players buying up their own little exclusive little slices of American entertainment - it's too late for a company like Netflix to enter the market with the same force that they had in the US. On trialling Quickflix before, I've always found their library looks good from the outside, but is ultimately too shallow, with heaps of paid rentals, and not enough all you can eat.

    Having said that, their library IS looking a little better *browsing now*. Though that open letter is annoying enough that I'll wait till I hear much better things before considering giving them any money.

      Netflix should be able to outlay a fair bit of money to get some content going in Australia. They are pretty big now.

Join the discussion!

Trending Stories Right Now