As Australia’s nascent online video streaming sector finally comes to life, the company that pioneered the local industry has suffered a massive first half loss.
Quickflix posted an $8.6 million loss for the six months to December 31, more than double the size of its loss a year ago and almost two and a half times the company’s entire current market value.
The company has now accumulated total losses of nearly $61 million since its establishment, originally as a mail DVD rental service, in 2004.
The dismal result comes as the company faces an onslaught of competition from media heavyweights Netflix, Foxtel, Seven West Media, Fairfax and Nine.
The Australian Competition and Consumer Commission on Monday gave the all clear for Channel Seven owner Seven West to take a 50 per cent stake in Foxtel’s Presto TV streaming service.
Foxtel CEO Richard Freudenstein said the move would boost TV streaming offering and help grow its broader Presto offering.
“We have big plans for Presto Entertainment to be a leading player in the SVOD (Subscription Video on Demand) space and are excited we can accelerate plans for Presto TV with our partners Seven West Media now that the ACCC has given their consent to our joint venture,” he said.
Fairfax and Nine launched their joint venture Stan on Australia Day with a marketing campaign focused on Breaking Bad prequel Better Call Saul.
And Netflix will make its entry to the Australian market this month, using the third season of House of Cards to headline its offering.
Quickflix founder Stephen Langsford has publicly welcomed the competition, arguing it will help grow awareness of streaming in Australia.
But the company is very much at risk of being overtaken by its rivals: Stan is already on track to have 100,000 subscribers by mid-March, according to its owners.
By comparison, Quickflix had 117,000 paying customers at the end of December, which represented a five per cent decline since June.
Quickflix has also taken the unusual step of asking its customers to buy shares after investors snubbed its $5.7 million capital raising in December.
The capital raising, which was to be used to fund working capital and buy new content, ended up securing just $650,000.
Quickflix shares closed steady at 0.2 cents.