Quickflix nears 20,000 users for online DVD rental service

Stuart Corner
Monday, 06 August 2007 05:49

IT Industry - Deals

Quickflix (ASX: QFX), which offers DVDs for rental ordered via its web site, says it had over 19,000 subscribers at the end of July, double the number a year ago.

In addition to revenue from DVD rentals it also announced in May that it would offer advertising on its site, which for the month of July recorded 176,708 unique visitors and 1.7 million page impressions. The company delivered its two millionth DVD in March 2007 and in May was processed almost 100,000 DVDs per month.

In an investor overview issued in May, Quicklfix suggested that, with 30,000 subscribers spending on average $300 per year, it would achieve an EBIT of $2.3 million, rising to $32 million with 500,000 subscribers spending an average of $210 per year.

In a prospectus issued in May the company said: "The range of titles available to Quickflix continues to grow at a rate of 500 additional titles per month. The current range of 25,000 titles includes 2,500 TV series and 1,980 children's titles.

"HD DVD and Blu-ray is expected to be a significant growth area for Quickflix as the company can efficiently and relatively cheaply service growing consumer demand through its centralised inventory management system whereas traditional video store chains may find it uneconomic to invest in several disc formats for multiple stores."

CCZ Equities Research issued a 'buy' recommendation on Quickflix in early July, shortly after the company had completed a $5 million capital raising. Analyst Roger Colman, said: "this issue will enable Quickflix to cement its position as Australia's only competitor to Telstra Big Pond Movies in the online film/games rental market with (at the moment) physical fulfilment. A video on demand package has already been put together in a one third (each) QFX, Destra and Magna Pacific partnership."