Quickflix In Trouble As Cash Runs Out + Subcriber Numbers Fall
The Company has reported a significant downturn in paying subscriber numbers and the business is fast running out of cash. TV vendors who have the Quickflix app on their TV’s have told ChannelNews that Quckflix is generating “very little interest” from subscribers.
The poor quarter, December 2014 ending result comes as CEO Stephen Langsford has been forced to to dip his hands into his own pockets to fund the Company.
Despite the poor performance Langsford claims he is confident Quickflix can not only hold its own and gain eyeballs, as Netflix enters and boosts the Down Under streaming market. “I’m a great believer in the effects of competition,” he said.
A former senior executive at the Company told ChannelNews “What bullshit. The Company is on it’s last knees and Langsford is desperate to find someone who will fund his business. What he is hoping for is to find an overseas buyer so that he can get some of his own money out of the business”.
The figures released yesterday show cash on hand at Quickflix has shrunk dramatically – from $5.17 million in December 2013 to $2.12 million a year later, a 59 percent plunge.
The company recently announced plans to raise $5.7 million in a share issue deal, partly to fund its coming battle with Netflix, which has announced plans to enter the Australian market in March.
Quickflix’s latest quarterly report to the ASX, published yesterday, showed the Aussie service had 136,670 customers at the end of the quarter in December. Some 117,106 of these were paying customers – the rest were free triallists.
While the paying customer total was down from 118,204 at the end of the previous quarter in September, Quickflix has more free triallists – 19,564 in December compared with 12,610 in September – and believes it will convert many to paying customers as their trials end in March.
Cash receipts from customers – most now paying a $9.99 monthly streaming fee – in the December quarter totalled $5.007 million, down from $5.03 million in the September quarter, but up 5 percent on the $4.75 million banked in the December 2013 quarter.
In a phone interview from Perth, where he is based, CEO Langsford told CDN that “this is a cash-burn business”, but the cash burn for the December quarter was well down on the previous quarter. And the capital raising issue should help recharge the coffers.
He predicted Quickflix – with its huge target device coverage, including games machines and smart TVs – will do well against competitors, both current and future, who do not offer similar connections. Some 50 percent of Quickflix streaming operates via smart tellies and consoles, he said – and its DVD rental service is “still bullish” as DVD stores close.
Langsford said another advantage Quickflix will have in its coming battle with the Yanks is its optional pay-per-view service on major TV series: “Netflix is subscription-only”, he noted.