News

Quickflix seeks to challenge Foxtel’s Presto by undercutting price with $9.99 offering

quickflix-logoQuickflix is seeking to challenge Foxtel’s new online movie portal Presto by introducing a streaming-only service priced at $9.99, half the cost of its rival as it looks to steer away from finncial problems which have plagued the company for the last two years.

Foxtel launched its streaming service Presto last month at a price point of $19.95, with extra charges to be applied for premium movies.

“We think $9.95 is a great price that will hopefully make it irresistible for many,” Stephen Langsford, founder and CEO of Quickflix, which started as a mail DVD service, told Mumbrella. “At that price it’s half the price of Presto and half the price of a movie ticket.

“We are seeing growing demand for our streaming service. In the last three quarters we have the number of hours being streamed growing by 20 per cent per quarter. Having got our service across all the various devices, we think it is time to hit the button and that is clearly demand for our streaming only service.

He said the brand was looking for “high double digit growth” of its service in the net 12 months, saying Foxtel’s entry into streaming, with the pay-TV network also offering online access to its channels via its Play offering, was driven by a need to move away from the high cost of acquisition in traditional subscription television business.

Quickflix has had a troubled few years with the company hitting a cashflow crisis in 2012 and having to do major capital raisings in 2013while its share price also hit a record low of 0.007 cents earlier this month and is now at just 0.o08 cents, compared with a year ago when it was 0.18 cents, giving it a market capitalisation of $9m.

Screen Shot 2014-04-29 at 11.36.17 AM“We have had our challenges,” Langsford conceded “I think we have met those challenges, at the end of 2012 I think we had just run a bit too far ahead of ourselves. It was very expensive rolling out all of our digital services, management has taken action to restructure and refocus the company. We are back on the growth path and I feel we have got the initiative.”

Langsford

Langsford

The Quickflix CEO said the price point for streaming combined with the company’s DVD offering meant the offer was sustainable.

“It is very much so (sustainable), many of our customers also take DVD or a combination but for those who want to at an entry level give Quickflix a go then, I think this is an irresistible price point.

“There is no doubt that this is a sector where there is plenty of interest. There are those who are talking the talk but we are the ones who are walking the walk.”

Quickflix claims it has 138,000 customers with around 60 per cent taking up a streaming option. Their streaming option allows up to six devices to be registered for the streaming service, instead of the three offered by Foxtel.

The Quickflix offering includes some HBO and BBC content but does not include major franchises such as Game of Thrones, which is held by Foxtel under a deal struck with HBO in late 2012 giving it first and exclusive access to premium shows.

The company also faces any increasingly competitive market with new entrants such as Hoyts, Telstra, and Nine all seeking to establish a toehold.

Langsford said he was ready for the competition. “I think this is a high growth sector with challenges but we have faced those and this is a demonstration that we are focused on gaining marketshare and increasing our marketing activity and investing in content.

“I think it lends itself to a pretty good activation and you’ll see that in due course.”

Update 1.10pm: – A spokesman for Presto responded: “Our competitors offer much older libraries and are unable to offer subscribers a timely selection of recent hits as part of their standard subscription within the same release window, which is where you’ll find Presto offers much more value.”

Nic Christensen

ADVERTISEMENT

Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.

 

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing.