Quickflix Claims Chinese Deal Dead, Many Not Surprised As Cash Runs Out
The content delivery Company that is now tipped to head to the same content graveyard as EziFlix who quit the Australian SVOD market last week, following the spectacular success of Netflix and the intense competition between Foxtel, Presto and Stan .
In what was not a surprise announcement to many including ChannelNews Quickflix has today said that they have aborted their acquisition of a Chinese content company but insists it will pursue a ‘China strategy.
The move leaves the increasingly cash strapped streaming video on demand (SVOD) service without a partner after it was forced to abort its deal to become a reseller of rival Presto’s service, as it looked to pursue a deal with the unnamed Chinese partner.
The Company is also running out of money as subscribers desert Quickflix who have not had the capital to pursue content from Hollywood Studio’s.
In a statement to the ASX this morning the company (ASX: QFX) said: “Based on due diligence of the Shanghai-based company and advice received in relation to Chinese regulations and restrictions, Quickflix has decided that it will not be proceeding with an acquisition.
“Quickflix recognises distribution of content into China and of Chinese content to the rest of the world is a significant opportunity and is continuing to develop a China strategy.”
Mumbrella said that the move comes after the company’s last financial reports showed it had lost $1.096m last quarter and had only $913,000 in cash on hand as of June 30.
Quickflix’s financial results also showed the company was reporting double digit declines quarterly and year-on-year subscriber numbers, despite a massive surge in consumer awareness on the back of the launch of Netflix and other SVOD players Stan and Presto.
The unusual nature of the Chinese “acquisition” by the cash strapped company led to speculation that the move may be a reverse takeover with the unnamed Chinese player looking to access Quickflix’s infrastructure and some $30m in tax losses.
The company said despite the Shanghai deal falling over it was “pursuing opportunities for licensing and operations its studio-accredited streaming platform as a branded or white-label service in other international markets”.