Mumbrella is reporting that Quickflix is stating negotiations with an “international” party about a possible “acquisition”.
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The Australian and New Zealand streaming service experienced a “sharp decline” in customers following the launch of US-based online television giant Netflix.
Quickflix carefully avoided naming the company it was in talks to buy, only saying that it “produces original Chinese language film and TV, participates in co-production in China and global markets and has a slate of future production inlcuding a co-production with a US studio”.
“The conditions precedent to the Foxtel Presto reseller agreement have not been met and that the agreement is therefore terminated”, Quickflix said in a statement. It has been developed at a cost of over $10 million over the last ten years, money from an array of hopeful investors who have yet to see any return.
Quickflix has a mere $913,000 cash in hand, and a quarterly operating loss of just over $1 million. Quickflix, which is listed on the Australian Stock Exchange and started in DVD rentals in 2004, is the oldest of a number of local firms were in the market before the arrival of Netflix in March this year.
The Shanghai-based company is profitable and generates free cash flow.
“Consolidation with Quickflix would result in the combined entity having a significantly improved financial outlook and ability to access further capital for growth”, the statement said. Netflix doesn’t really need to, unless it plans to simply cut the company out of the market altogether.
Quickflix announced a partnership with Foxtel in May to deliver Presto services through its platform, however the deal has since collapsed.
“The government’s move to enforce GST for the supply of digital content services is the right one”.
“The introduction of this legislation will not only help to maintain consistency across the competitive landscape, but it will also ensure that Australia gets its due taxes from the companies that choose to do business here, which benefits all Australians”.
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Quickflix expects to update the market on, or before, August 20.
