The over-heated streaming TV sector has claimed its first significant Australian scalp with the demise of Quickflix.
Quickflix was one of the pioneers of physical DVD delivery and then streaming services but had struggled to keep up with new players such as Netflix.
Despite being placed in voluntary administration with Ferrier Hodgson appointed at the end of May, Quickflix founder Stephen Langsford remained confident that the company may rise again.
Langsford has been clear that Nine Entertainment, a key investor and competitor was to blame.
Quickflix had advised the market that the tranche of redeemable preference shares (RPS) held by Stan Entertainment, which is jointly owned by Nine and Fairfax Media, was a major barrier to raising new capital. This factor proved to be the nail in the coffin for Quickflix. Nine had acquired the RPS from HBO, which had made the investment after constructive discussions in 2011.
“Issues arose in 2014 when Nine Entertainment acquired the RPS from HBO for an undisclosed sum, which we believe was a fraction of the face value. While Nine indicated that they were treating the acquisition as a financial investment, their actions — and inaction — since the acquisition tend to indicate otherwise,” Langsford said.
Quickflix stated that it couldn’t afford the price set by Stan to restructure the $11.7 million worth of redeemable preference shares - a prerequisite for interested investors.
Stan demanded either $4 million in cash or $1.25 million plus all of Quickflix's streaming customers.
Quickflix management is in the process of submitting a plan to administrator Ferrier Hodgson which hopes to reposition the company as a broader based “digital consumer, e-commerce and entertainment player’ and allow new capital to be raised.
Quickflix's first creditors meeting was held on May 6 in Perth.
The demise of Quickflix is certainly not the first casualty in Australian entrepreneur’s attempts to bring IPTV style service to our shores.
In September 2015 online video store EzyFlix made a sudden exit from the Australian and New Zealand markets. EzyFlix launched in 2011 by online DVD retailer EzyDVD, part of the group that owned he Video Ezy and Blockbuster video store chains in Australia.
EzyFlix was a direct competitor digital video stores such as Apple's iTunes, Google Play and Telstra's Bigpond Movies, which sell and rent movies.
Earlier that year in April, Reeltime Media, the founder of defunct IPTV trailblazer ReelTime.tv was plunged into voluntary administration. ReelTime Media or ReelTime.tv was an IPTV provider founded in 2005 and listing on the ASX in 2006. Reeltime sold its original assets in 2008 to EzyDVD to form the service EzyDownload. At its brief peak it has partnered with digital venture Yahoo!7 for distribution which ultimately failed to get traction.
Specialist IPTV systems integrator focusing on service providers and enterprises. CombiTel offers unmatched value to its clients based on its unique mix of skills and many years of experience in both Telecommunications and Broadcasting. We have a proven track record and happy customers in Australia and New Zealand.
More information: combitel.com.au