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Monday, 01 September 2014 14:35

Quickflix quickly bleeding cash Featured


Local Netflix competitor Quickflix is hemorrhaging money in a bid to acquire both new customers and content, losing $10.15 million for the full year to June 30.

The losses were a jump of 58% with revenue was down 6% to $18 million, after what's been described as a soft first half.

The company's financial troubles couldn't come at a worse time, with Foxtel slashing the price of its streaming service Presto in half recently and US-based giant Netflix reportedly preparing for an Aussie launch.

Netflix use has exploded in Australia despite not being officially available here, with hundreds of thousands of Australians using geoblocking services to pay for the flat-rate streaming website.

Further competition is expected not only from Netflix but also Nine and Fairfax, which recently announced a $100 million StreamCo joint venture.

As we reported in July Nine Entertainment bought some of HBO's stake in Quickflix - more than 91 million convertible preference shares - but transferred them to StreamCo, which is yet to launch.

These shares are not quoted on the stock market, but can be converted into normal shares at a discount.

Seven West Media is also reportedly in talks to join the streaming fray.

The second half of the year was better than the first for Quickflix which saw $9.4 million in revenue - 9% higher than the first half -reflecting the return to paying customer growth.

The company's total number of customers increased by 27% to 135,690, with paying customers up 21% to 122,862.

Operating costs before customer acquisition reduced by 2% to $23.2 million, while marketing and free trial service costs increased by 77% to $5.5 million to drive customer growth.

Quickflix also said it had $2.4 million in the bank.

"Our annual results were in line with market expectations as we report quarterly," a company spokesperson told iTWire. 

"It is worthwhile highlighting that Quickflix achieved a stronger second-half year with growth in paying customers (and revenue) reversing the decline in the first-half. We continued to invest in our platform and in the second-half increased our marketing commitment which has translated into customer and revenue growth for the second-half."


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