Nine Entertainment has bought a large stake in Quicklflix by acquiring some of the stake held by US cable network Home Box Office (HBO). The company is in play, especially goven the amount of actovity in the Australian video streaming market.
With US streaming giant Netflix on the prowl, an acquisition of Quickflix would be a quick and relatively inexpensive way for it, or any other player, to enter the market. This is speculation on iTWire's part, but look at the numbers.
Nine Entertainment acquired 91 million ‘redeemable convertible preference’ shares from HBO, part of the US company’s $10 million investment in Quickflix in 2012, which included a content licencing deal. These shares are not quoted on the stock market, but can be converted into normal shares at a discount.
Those normal shares are now worth just 1.4 cents, still the highest since January. They were previously trading at 1 cent, after hitting a low of 0.7 cents in June. The company’s shares, once worth over 20 cents each, have been languishing for years as it has attempted to turn a profit from the nascent streaming market.
Quickflix says it is now cashflow positive, after losses of $6.4 million in 2012-13 and $4.2 million in the first half of 2013-14. Its market capitalisation is now around $16 million. That is much less than it has invested in its impressive infrastructure, making it an attractive takeover target for anyone wanting to enter the market.
Watch, as they say, this space.
Quickflix was approached for comment but was unable to reply before our deadline.