Quickflix won’t be the last corpse in Australian streaming TV
Quickflix's appointment of administrators is just the start of consolidation.
The most surprising thing about Quickflix's announcement yesterday that it had appointed voluntary administrators is that it didn't happen sooner.
18 months ago, Quickflix was effectively the only player in Australian streaming video on demand (SVOD), offering the option to stream mostly older movies for a monthly subscription fee as well as DVD rentals of newer titles sent to you. But in late 2014, Netflix announced its plans to officially launch in Australia, which in turn stimulated rivals Presto and Stan to rush into the market as well.
Suddenly Quickflix was an also-ran, with the least impressive catalogue of any of the available options. Its only unique selling point was DVDs by mail, and that was never likely to be a profitable business in a market the size of Australia.
The process of Quickflix dying has been agonisingly slow and public, in large part because as a listed company (it has been on the ASX since 2005) every attempt to right the ship has needed to be made public. It lurched from one strategy to the next, trying to tie up a deal with Presto but then deciding it would enter the Chinese market instead, and then abandoning that plan. Staff cuts and relocations followed.
This was only ever going to end one way. While in theory voluntary administration doesn't mean the business is dead, the smart money is on a Dick Smith style collapse, not a last-minute rightsizing and a return to profitability.
It's never good to see a business fail, but let's not overstate this. Quickflix cloned the Netflix model (right down to part of the name), and it had a decade's start on its overseas inspiration. If it couldn't establish a beachhead in that time, it was never likely to survive once the competition actually arrived.
The key question isn't why Quickflix failed, but which service will be the next to follow it. Australia is a country of around 24 million people. That's simply not enough people to make Netflix and Stan and Presto and hayu all profitable (and certainly not big enough to see more than a handful of local productions on those services, no matter how brilliant No Activity is). Eventually, we're bound to have fewer choices.
Presto's key advantage is being half-owned by Foxtel (along with Channel Seven), which has ongoing rights to many popular TV shows and movies. Stan (Channel Nine and Fairfax) also has a decent wodge of shows, which means that Netflix in Australia offers rather less titles than in the US. While many people will work around that with a VPN, that's too fiddly for the casual viewer. It's trickier to tell with hayu, which has a defined niche market and isn't signing away rights to others.
It's not that paying $36 a month for all four services is ridiculously expensive. However, ultimately that price point has to make money for the operators. It's hard to see that happening in the long run. This won't be the last streaming TV funeral.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.
Picture: Miles Goodhew, licensed under Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (image cropped)