Digital Media

Commercial TV has most to lose with Netflix arrival, says Quickflix

Quickflix is not concerned about losing customers as Netflix launches in Australia, but says there are some big legacy players with plenty to lose in Australia's streaming future.

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Screenshot by Claire Reilly/CNET

As Australia prepares for the arrival of Netflix in 2015, the industry is already speculating what the local launch will mean for Australia's existing services and the broader content streaming landscape in the country as a whole.

One of the major services that will be battling it out with the newcomer -- both in terms of netting potential customers and trying to tie up exclusive content deals with rights holders -- will be Quickflix. Monikers aside, the two companies share similar histories, finding their feet in the industry as DVD rental services that morphed into broader digital offerings.

But while their similar business models could make for friction (and indeed have done in the past, with Quickflix accusing Netflix of "turning a blind eye" to Australians' "back door" usage of its service) Quickflix CEO Stephen Langsford is not too concerned about losing customers as a result of Netflix's "much anticipated" launch.

"I think Netflix's arrival will add enormously to building awareness as streaming goes mainstream," he said. "It's game on."

A challenge for commercial TV

Langsford said Quickflix is in position of strength in Australia thanks to its roots in the DVD rental space, which has given it invaluable data and insights into Australia's viewing habits. He also pointed to Quickflix's runs on the board -- three years in the local market, delivering 50 million movies and TV shows to a customer base of half a million Australians -- saying that newer services (largely from commercial TV stations) would be the ones to suffer when Netflix comes to town.

This is not something you create overnight in the market. So thankfully we're not saying, 'Yes we might launch a service some time soon, we're still building it'. We've got lots of learnings.

The fact is the large audiences in Australia today are those watching commercial TV and expensive pay TV. They're the ones to be won. I think as they become aware that there are great services for streaming -- Netflix is one, Quickflix is another -- then the whole market category will benefit.

I think the old models of commercial free-to-air TV...and Pay TV, with its high-cost infrastructure, they're the ones who will face a challenge.

In what could be taken as a subtle swipe at the new joint venture being launched by Nine Entertainment and Fairfax, known as 'Stan', Langsford said a new player typically couldn't jump into a market straight away and expect to be successful -- especially when they have "an existing commercial free-to-air TV station to protect".

"I wouldn't want to be in the position of those folks who are hurriedly trying to rush out a subscription streaming service that has frankly taken Netflix and Quickflix years to develop and finesse," he said.

Unlike commercial TV broadcasters playing in the streaming space, Langsford said Quickflix did not have to worry about propping up an existing broadcast business -- its only focus is to "thrill" customers with new content.

In that respect, Quickflix has just inked a deal with Sony Pictures to bring well-known series such as "Breaking Bad" and "Masters of Sex" to the Quickflix Premium pay-per-episode platform. It's a big win for the Australian service, especially with Stan promoting Walter White as one of the big attractions on its yet-to-be-launched service.

Winning on content and price

There has been plenty of talk about Netflix becoming the silver bullet for content-hungry consumers -- a service direct from the land of Hollywood that has acquired an almost mythological status as the home of all the TV and movies one could want.

But a closer look at the US service reveals that, just like Australian streaming services, it offers a certain pricing model (a monthly, all-you-can-eat subscription), with its own drawcards (Netflix originals such as "House of Cards" and "Orange is the New Black") and its own drawbacks (for example, no HBO content such as "Game of Thrones").

As such, there's no reason that Quickflix and Netflix need to be mutually exclusive in Australia. According to Langsford, there is strong evidence out of the US that customers subscribing to Netflix often subscribe to other services such as Hulu or Amazon Prime to fill out their content dance card.

"Orange Is The New Black" Screenshot by Joan E. Solsman/CNET

And thanks to existing content deals that Quickflix has already tied up for Netflix original series such as "Orange is the New Black" (which Langsford said has been "fabulously successful" for the local streaming service), existing customers won't lose access to Netflix shows just because the creators behind the content are making their way to the Australian market.

When it comes to price, Langsford said that at less than AU$10 a month for up to three concurrent streams on six devices, the Quickflix service was a "no brainer". But with more competition in the Australian market, pricing could be set to come down.

"We'll keep on our toes in terms of affordability," he said.

When it comes to the future of content streaming in Australia, Langsford said it would only be the "fleet of foot" services that would survive by offering great content and easy access while still maintaining that 'no-brainer' price. And with 8 million Australian households up for grabs, Langsford said Quickflix won't be the big loser when it comes to grabbing a slice of the streaming pie.

"What can be won here are the millions of customers who are increasingly starting to think...'I'm no longer happy watching whatever is being served up to me through commercial TV'."