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Quickflix Bounces Along The Bottom, CEO Dips Into His Own Pocket To Keep Company Solvent

Quickflix Bounces Along The Bottom, CEO Dips Into His Own Pocket To Keep Company Solvent

Quickflix who has burnt through millions in capital is according to one insider set to “get hammered” by Netflix when they launch in March 2015, with some observers telling ChannelNews that the Company that has had the for sale sign up for more than 12 months.

Observers believe that Nine Entertainment who are a shareholder in the streaming Company could get the business if it was placed into administration. 

“The 100,000 + subscribers that Quickflix have on their books could bolster Nine Entertainments investment in Stan however there are serious concerns about the value of the Quickflix subscriber base”. A former senior executive of Quickflix said.  

Last year Langsford shop the market for $5M+ in funding, he only managed to raise $650,000.

Earlier today Quickflix shares dropped to a record low of $0.002, in 2014 the high was $0.14 cents.

The Company that is now valued at just $3.63m which is 70% down on what it was worth in January 2014.

ChannelNews has been shown a business plan by former employees who believe they could raise the capital to buy the business out if it was placed into administration. 

A Quickflix competitor said Quickflix is gone, they are dying a slow death. They have hawked the business for sale and a lot of people have looked at the books but they have not liked what they see. What the directors want is a quick sale to kill the misery directors are facing. Netflix is coming and they are the ten ton gorilla who already have more VPN subscribers to their US service than what Quickflix have managed to build during the past five years”.  

Mumbrella reported that ASX documents show Langsford and his relatives were among the main investors in the most recent capital raising, with a notice of initial substantial shareholder showing that he increased his stake in the company to 130.3m shares, a 7.18 per cent share of the company, up from 4.97 per cent in July. 

Langsford was tight lipped when asked about the investment, stating: “We have made all our disclosures on what we have raised and my increased stake. I have increased my holding as a result of participating in the rights issue that we did last Christmas.”

ASX documents show Langsford acquired 57.4m new shares, an investment of $172,000. He was not the only Quickflix executive to invest in the company with CFO Simon Hodge buying 11.4m shares an investment of $34,200.

The Quickflix boss acknowledged the looming threat from rivals, with global streaming giant Netflix rumoured to be planning a $30m Australian ad campaign, as well as new local streaming entrants Stan and Presto, but argued the company would benefit from the increased awareness among consumers.

He told Mumbrella “Quickflix is an established business, we have existing customers presently through online video rentals and also streaming which is generating revenue for us, so we have a degree of flexibility about how we approach customer acquisition,” said Langsford.

“There is definitely competition in this quarter but a lot of that will be above the line advertising. I believe and we have said that will boost awareness amongst the category.

“Our game plan is to move the business to sustainability. The advantage Quickflix has is that we do have an existing customer base which is generating revenue and we do have a strong point of difference to the incoming SVOD players, in that our business is complemented by DVD rentals – not only SVOD revenue but transactional.”

Late last year StreamCo, the parent company of rival Stan, took a $1m stake in Quickflix with redemption rights should the company face a “liquidation event”. Since then Quickflix share price has continued to slide.

“Getting ready for streaming is an expensive exercise – we have incurred that cost. While others are now incurring that cost we are now focusing on getting more and more distribution and more and more customers.”

The question he refuses to answer is “where is the capital or financial guarantees going to come from to pay the upfront fees that Hollywood studio’s demand prior to allowing distribution of their content”.