Quickflix looks to avoid Netflix's failures

Home-grown streaming service Quickflix is rapidly gaining momentum after content giant Home Box Office (HBO) today made a multimillion-dollar investment in the company, but Quickflix founder Stephen Langsford told ZDNet Australia that the company needs to be careful to avoid the mistakes of US streaming giant, Netflix.

(Credit: Quickflix)

The deal, announced to the Australian Stock Exchange today (PDF), sees HBO invest $10 million in Quickflix in exchange for 83.3 million preference shares (at 12 cents per share), or 15.7 per cent of the company after conversion of the stock into ordinary shares.

HBO, which is fully owned by Time Warner, will also score a seat on the Quickflix board as part of the deal, which is yet to be approved by company shareholders. The company board has fully endorsed the deal and is encouraging shareholders to do the same.

Langsford told ZDNet Australia in an interview that the multimillion-dollar investment will propel the company forward on its growth plan.

"We're right at the beginnings of this massive wave with IPTV-delivered movies and TV series. We're running hard to propagate Quickflix across consumer devices and round out content from big studios ... and you'll see a continual roll-out of more studios, more content and more devices over the coming months," the Langsford said.

However, Langsford added that new investment, new content partners and new subscribers will all have to be carefully handled to avoid the mistakes of companies like Netflix.

The last 12 months have been less than kind for Netflix, as it shed hundreds of thousands of subscribers and failed to successfully launch a spin-off DVD-by-mail business called Qwickster. The company's share price tanked, leading to a class action lawsuit led by angry shareholders.

Langsford said that Netflix brought its woes largely upon itself after an unwelcome price hike and providing a poor customer experience, both in uptime and usability. He believed, however, that the company was on the rebound.

"Netflix's issues were of their own making in large part. What we believe is that the best experience for customers is to have one great interface [and] that usability is important for customers. We've made a substantial investment in Quickflix's customer platform, streaming in particular over the last couple of quarters and that investment is ongoing [to support subscriber growth]," he said.

As Quickflix continues to expand its content offering for Australian consumers, Langsford said that he is less and less concerned about piracy, adding that content producers see Quickflix as a cheap and effective way of distributing copy-protected content in the Australian market.

"I think I'd turn the problem of piracy on its head when it comes to Quickflix. It's widely acknowledged that piracy is resulting around $1 billion in lost revenue to content owners. The reaction we're getting is support and enthusiasm from studios as a legitimate and high-growth means of distribution that sees them launch to more consumers and get their content out," he said.

Quickflix has recently announced streaming deals with cross-platform partners including Sony and Samsung Electronics that sees its content streamed to gaming consoles, IPTVs, tablets and mobile phones.