Quickflix calls trading halt as troubled streaming player seeks new capital raising
Troubled video streaming service Quickflix has put its shares in a trading halt for the second time in a week, as the company seeks a sorely needed new capital injection.
Last week Quickflix announced it was dumping much of its own streaming operations in favour of a deal making it a reseller of rival service Presto’s content.
News of the company seeking a cash injection from shareholders comes just a month after the company accounts showed it is losing around $850,000 a quarter, with just $1.26m in cash on hand.
The new deal with Presto is likely to lower the streaming service’s cost base but it is still likely to need further investment over the coming months.
Comment is being sought from Quickflix about the size and scale of the capital raising. The trading halt will end no later than May 21.
An earlier capital raising in late 2014 saw senior executives in the company invest heavily but still only raised $650,000 of a potential $5.2m sought from the sharemarket.
Stephen Langsford CEO of Quickflix told Mumbrella then: “The process continues, so I wouldn’t draw the conclusion that the capital raising exercise is yet complete.”
At the time of the trading halt the Quickflix shareprice was at 0.003 cents after surging from 0.001 cents last week after the Presto deal was announced, giving it a market capitalisation of $4.54m.
Nic Christensen
So the first of the far-too-many SVOD players, likely to go belly up is Quickflix.. losing $850,000 a quarter.. ouch!
I wonder who has the deepest pockets to survive the huge losses the whole industry will suffer: Netflix / Presto / Stan / Foxtel ?
Seriously, in a market that can only sustain one satellite tv provider (foxtel) with 27% market penetration, how the hell can 5 SVOD players all stay in business and make profits?
The shallowest pockets will lose in this mad race to lose money, eventually closing down or selling its subscriber base to a competitor.
There will end up with only 1-2 players at the end of this madness, with millions wasted.
But then again, who am i to talk. Its not my money that’s being wasted..
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Australia can easily support 3 SVOD players providing they can
1.Contain piracy, I think that was an issue for Quickflix.
2.Charge a fair price for consumers, $10 per month seems the norm. I think a lot of households will end up taking out more than one subscription.
3.Good selection of up to date content, same as North American and European markets.
4.The country has a decent internet infrastructure which was probably another issue for Quickflix, they were probably ahead of their time.
As for satellite television the only reason it has never got pass approx 30% penetration is the ridiculous prices they have charged historically for their packages which a lot of households couldn’t justify spending on.
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A big issue for Quickflix was the amount of Australians backdoor downloading from Netflix.
Quickflix’s losses have mainly occurred through creating UI systems that were non-existent in Australia and to enable streaming to new devices. Yes the losses are big but they just wrote down over $8M in developing these new UI’s Quickflix’s DVD rentals area are a profit maker, and they are only SVOD in Australia offering both DVD and streaming. They have over 60,000 titles including Game of Thrones to S4 , Orange is the New Black etc . They also have some of Netflix’s own inhouse productions tied up under contract. Gift cards start selling in Officeworks , Big W and others under a deal with Blackhawk , starting this month . So hang in there .
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Do not write-off Quickflix yet. I think it will survive.
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Quickflix is a gonner!
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1) The boss of Quickflix is in the US at the moment . I don’t think he would fly over thinking he would just be given extra funds by turning up on someones front door.. This is already sown up. 2) The change in direction of becoming an Affiliate reseller is also going to reshape the industry. Watch the other SVOD’s try this now.
Note: Writer is shareholder of Quickflix.
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