Quickflix Restructures Streaming Debt28 Dec, 2015 By: Erik Gruenwedel
Quickflix has restructured more than $7 million (Australian) in content license agreements related to its subscription streaming platform, according to a regulatory filing submitted by founder and CEO Stephen Langsford.
In an effort to buttress a fiscally challenged balance sheet, Perth-based Quickflix, which also operates a legacy by-mail disc rental service, said it eliminated more than $5 million in pending license obligations with major studios and related content holders.
In addition, the company restructured payment obligations for current SVOD agreements, agreed to unspecified royalty payments for future revenue generated, and agreed to issue more than 51 million stock options.
The restructuring follows an Oct. 26 filing outlining the elimination of $2 million in SVOD licensing obligations. The company also downsized its workforce 20%, realizing $1.7 million in annual savings.
Quickflix, which ended its most recent fiscal period with 109,000 subscribers and $3.9 million in revenue, plans to use the enhanced balance sheet to secure re-capitalization going forward.
Langsford, in the October filing, admitted the company was operating in a challenging (i.e. Netflix-dominated) video-streaming sector.
"Competitors are expending enormous amounts of money on marketing and content in a bid to secure market share. Quickflix will not seek to compete head-on in this environment; rather, it will focus on developing a niche and differentiated streaming service supported by its profitable online DVD rental service and attracting new customers through low-cost partner and affiliate channels,” wrote the CEO.
Indeed, Netflix, in its most recent filing, disclosed it had more than $10 billion in third-party content license obligations. It also ended the period with more than 62 million global subscribers, including a reported 2.5 million members in Australia.