Late last year, online movie and DVD rental service, Quickflix, found itself in a sticky financial situation and entered a trading halt, pending an announcement about a capital raising.
A few days later the company was put into further disarray when key board members began leaving. First, HBO executive Henry McGee, who was quickly followed by CEO Chris Taylor and deputy chairman Justin Milne.
The Australian Financial Review said the company was perilously close to being handed over to administrators, and it looked like it was all over for Quickflix.
While revenue has been steadily increasing at the company since 2010, rising 56 per cent in the 2011/12 financial year to $16.9 million, operating profit dropped a massive 443 per cent over the period to $-3.5 million.
However, late last year Quickflix received an early Christmas present – on Christmas Eve, the company announced it was receiving a $5 million investment from BluePrint Partners.
Tim Parsons, chief technology officer at Quickflix, told Computerworld Australia the company is still finding its feet.
“Fundamentally Quickflix is still a start-up business. Yes we’re a publicly listed company, but we’re also a company that is trying to figure out how to make this work,” says Parsons.
“We’re a company that is still pretty small and we have our ups and downs … I would say that the media does like to write a story that’s going to grab attention and get a headline and that’s their right, but I think there was a fair bit of noise and the reality was different – we’re still here.”
Parsons says this negative operating environment is one that media companies typically find themselves in for several years before things turn around.
“Quickflix is no different. We’ve got to get ourselves to profitability. Our plans have changed dramatically in the last few months. We were originally aiming for profitability in 2014. We’re now aiming to get there this year,” Parsons says.
“If we can achieve break-even this year, then that would be a major achievement – that would be a serious milestone for Quickflix. That will also open up a lot of other [opportunities] for us, so I think that’s our principle threat right now – ourselves.”
Established in 2004, Quickflix listed on the Australian Stock Exchange in June 2005 and has recently seen its share price drop from around 8 cents in July 2012 to just 2.5 cents.
The company is now going through a transformation, shedding a third of its workforce at the end of last year and implementing other restructuring activities. This means the company now has a lower cost base and some projects have been put on hold.
However, Quickflix still has grand plans for 2013. In October last year the company struck a deal with Optus Wholesale to offer its online movie and DVD rental services to the telco’s wholesale service providers.
This would allow Optus resellers to provide Quickflix services to their customers on one bill.
So far, Exetel is the only Optus reseller who has confirmed it plans to offer Quickflix services, with the ISP still finalising pricing details.
“We’re trying to make effectively what is the Netflix or the Amazon play … which is a subscription service where people can stream as much as they want for a set fee and also [receive] DVDs and Blu-Ray [titles] by postal service, again where people can pay one fee,” Parsons says.
He says Quickflix would also like to introduce technology that would allow users to pause a program on one device and resume play on another device. The company also wants to collect ratings data from televisions, computers and mobile devices.