Since late 2011, Quickflix has been a quiet performer in Australia’s increasingly crowded subscription video on demand market, with an all-you-can-stream video option as well as rentals of TV and movies alike. Long before that, it was a DVD mailing rental service, founded back in 2002. Today is another big bump in the road for Quickflix, though, and it may well be the last: the company has been placed into voluntary administration and might be dismantled.
After several months of company restructure, Quickflix today announced to the ASX that voluntary administrators from Ferrier Hodgson had been appointed to steer the business — and the statement says that streaming competitor Stan is largely to blame.
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The reason for that is that Stan owns a significant portion of shares in Quickflix, which it bought for $1 million in 2014 in a fire sale from HBO — the original owner of the shares, which it exchanged for a $10 million investment in Quickflix alongside the commencement of a sell-through agreement that was the start of Game of Thrones’ easy online availability in Australia.
With a significant stake of preferential shares, Stan’s ownership acted as a disincentive for any other investors to come on board, and despite Quickflix’s significant restructuring the company has been unable to attract any other investment. To pay out its stake, Quickflix’s ASX announcement says that Stan wanted either $4 million cash or $1.25 million and the entire Quickflix subscriber base, as well as a promise not to compete on Quickflix and Stan’s current territory of subscription video on demand.
Quickflix’s quandary means that the company is effectively stuck in a stalemate, unable to raise new funds or to pay its dues to Stan and Nine Entertainment. Quickflix’s administrators “intend to operate the… business as usual with customers and new customers unaffected”, though, and Quickflix’s New Zealand business remains unchanged. The future for the company, though, is unclear — but it does effectively mean that the streaming playing field in Australia narrows down to Netflix, Stan, Presto and a few smaller contenders.
Disclosure: Stan is a 50/50 joint venture between Nine Entertainment and Fairfax Media. Allure Media, the company which publishes Gizmodo Australia, is also owned by Fairfax.