Quickflix Fiscal Year Loss Balloons29 Nov, 2012 By: Erik Gruenwedel
The SVOD service similar to Netflix will cut staff, among other cost-saving measures
Quickflix, Australia and New Zealand’s by-mail disc and subscription video-on-demand rental service, Nov. 29 said it is cutting staff and other expenses after posting a fiscal-year (ended Sept. 30) loss of nearly $14 million (Canadian) on revenue of $20 million, compared with a loss of almost $3 million during the previous year.
The Perth-based service, which earlier this year received $1 million in funding from HBO, said it had just $2.2 million in funds available while ending the fiscal year with less than 116,000 monthly paying subscribers from a base of 160,000 signups. Worse, Quickflix spent $60 in subscriber acquisition costs ($9.8 million) — nearly double the cost it took to attract a single sub in 2011.
While positioning itself as the only “Netflix-type” service in Australia and New Zealand offering SVOD and disc rental movies and TV shows to connected consumer electronics devices, Quickflix is hemorrhaging money attempting to emulate the by-mail and SVOD pioneer.
Indeed, Quickflix said its disc rental business is profitable and provides the basis of revenue to underwrite rollout of the SVOD platform.
The service said it plans to curb current $1 million monthly cap-ex spending by restructuring operations, including combining DVD and digital services and fulfillment, and reducing staff by one third, which will save $2 million annually.
Quickflix also plans to better utilize its disc library through improved recommendation software, reduce DVD investment, expand pay-per-view offerings and maintain SVOD spending in line with subscriber growth.
Finally, CEO Chris Taylor is departing by the end of the second quarter of fiscal year 2013, with his position being assumed by board chairman Stephen Langsford.