After entering a trading halt on the Australian Securities Exchange yesterday, Quickflix has announced it has penned a deal with Foxtel to distribute its Presto TV and movie content streaming bundles through the Quickflix streaming platform.
Quickflix raised questions about the future of its own online content offering yesterday when itabout a "material commercial agreement in relation to its streaming service."
But while the company has been, today's news was not of a sell-off but of an expansion of its online streaming business.
According to a statement from Foxtel, the deal allows Quickflix to "market and sell" Presto TV, Presto Movies and Presto Entertainment (TV and movies) bundles, currently offered by Foxtel in partnership with Seven West Media. Quickflix customers will now be able to access Presto's subscription video on demand (SVOD) content alongside existing Quickflix pay-per-view movies and pay-per-season TV series, making Quickflix an "affiliate reseller for Presto."
Speaking from LA in a phone interview today, Quickflix CEO Stephen Langsford said existing and new customers would see a "seamless" integration of Presto's SVOD catalogue alongside Quickflix's own "transactional" content across all platforms that the service operates on.
Under the arrangement, Quickflix will no longer offer its own SVOD TV shows and movies, leaving Foxtel to look after the rights deals for this content, which will now be branded as 'Presto' on the Quickflix platform. This change in content will be matched by a "major upgrade" of the Quickflix user interface to streamline the two brands.
Langsford also noted that Foxtel and Seven West Media would bring a strong financial backing under the deal, allowing the service to land a broader content offering for customers. Without going into the detail of which titles Quickflix may lose under the partnership, Langsford said overall customers would see a stronger catalogue. The company is yet to confirm if the deal would see any change to pricing for customers
Langsfords comments reiterated the official line he took in the company's statement to the ASX today, noting that Presto was an obvious choice of partner for the company.
"After a review of prospective partners, it was obvious that Presto has the most impressive line-up of subscription streaming movie and TV content," he said. "Streaming is taking off and this agreement will significantly bolster our content offering for existing and future Quickflix customers whilst improving our overall operating economics."
Strength in numbers?
The deal now sees Quickflix aligned with two of its major competitors in the Australian streaming market. Alongside the deal between Quickflix and Foxtel's Presto, Nine Entertainment (which owns 50 percent of rival streaming service Stan) also owns an 8 percent stake in Quickflix.
But despite today's positive news, Quickflix has not been without its share of struggles in recent months.
In its last quarterly results statement, Quickflix reported AU$850,000 in cash losses over for the first three months of 2015, ending the period with just AU$1.26 million on its books. CNET understands that the real strength of the business is Quickflix's legacy DVD delivery service which has been the cornerstone of its offering since the company entered the market in 2003.
While customer numbers for Quickflix streaming inched up in early 2015, the figure was still well short of the number of customers reported to be using Netflix in Australia before the service had even launched in the local market.
While questions about the ongoing viability of Quickflix streaming remain, Media industry news site Mumbrella reports that the company struck the deal in order to avoid triggering a condition that would require it to pay Nine Entertainment (owner of rival Stan) $10.5 million in the event of a takeover.
According to Mumbrella, when Nine Entertainment , they came with a clause entitling Nine to a $10.5 million payment in the event of "a disposal of substantially all of the Company's assets, a merger or takeover" or other significant changes to shareholder ownership or the board of the company.
Speaking from LA, Langsford today dismissed this the reports as "nonsense."
The deal between Quickflix and Foxtel subject to a number of conditions in relation to due diligence and funding arrangements and is yet to be fully finalised.
Updated at 12:45 p.m. AEST to include interview comments from Quickflix CEO Stephen Langsford