Quickflix experienced a strong March quarter of growth increasing its base of paying customers by 16,000 or 16 per cent to 118,557.
Total active customers (paying customers plus introductory trialists who have registered with a valid credit card) increased by 13 per cent to 137,059.
Organic growth through customers signing up on Quickflix-enabled devices; increased marketing and promotional activity; and underlying demand for streaming contributed to the momentum in the quarter.
Revenue for the quarter was higher in line with a growing paying customer base. Revenue recorded of $5.2 million represented an increase of 9 per cent on the previous quarter. The growth came from an increase in the number of monthly subscriptions and demand for additional streaming of pay per view movies and pay per episode TV series.
The continued investment in streaming content including new licensing deals announced in the quarter is servicing demand. The strength in streaming is reflected in Quickflix recording its third consecutive quarter of more than 20 per cent growth in streaming volumes.
Over 50 per cent of Quickflix streaming is to smart TVs and game consoles with the balance to mobile, tablet, laptops and other devices. Increasing uptake of smartTVs pre-loaded with Quickflix plus demand for new generation game consoles like PlayStation 4TM are increasing the addressable market for Quickflix. (The launch of Quickflix on XboxOne, previously scheduled for the March quarter is now anticipated for later in April.) Already customers in Australia and New Zealand have registered over 0.3 million devices to stream Quickflix, a number that increased by 24 per cent in the March quarter alone.
Net operating and investing cash outflow for the quarter was $1.3 million, which was an improvement on the outflow of $1.8 million reported in the December quarter (excluding the R&D tax receipt of $0.9 million). During the quarter Quickflix increased expenditure on marketing, streaming content and delivery costs in line with growth and continued management of other expenditure and working capital.
Quickflix is well positioned to drive further growth. The streaming market in which Quickflix has established a lead is gaining acceptance amongst consumers and growing rapidly. In response to the threat of over the top (“OTT”) streaming to its core payTV business, industry-major Foxtel launched its OTT service during the March quarter. This new competition will increase awareness of streaming generally amongst consumers, which may in turn benefit Quickflix.
Quickflix’s offering is very competitive – unlike the Foxtel service, Quickflix streaming includes TV series, high definition “HD” content and pay per view latest releases; and is widely available on a range of devices including smart TVs and game consoles. At a much lower monthly subscription price than Foxtel, Quickflix is also considerably more affordable.
Quickflix’s dominant position in online DVD & Blu-ray rental puts it in an excellent position to significantly grow its share of the $1.5 billion per annum DVD & Blu-ray market, even as that market contracts as is expected over the decade ahead. The DVD & Blu-ray service complements Quickflix
streaming and is an important differentiator in the market providing customers access to largest range of content in Australia.
Quickflix is now focused on sustaining growth and entering new partnerships in Australia and New Zealand. It is in early stage discussions with investors and potential strategic partners in relation to expansion opportunities in both markets.