Quickflix to survive under new US owner
After being suspended from trading on the Australian Stock Exchange earlier this year, one of Australia’s first video streaming services, Quickflix, has a new lease of life.
US-based company Karma Media has bought it for $1.3 million.
The Perth-based Quickflix, which started out in 2003 as a DVD rental company before expanding to on-demand video streaming services, has been in voluntary administration since May 6, 2016 under Deloitte Restructuring Services partners Jason Tracy and Richard Hughes
It was suspended from trading on the ASX earlier this year after being overwhelmed by the arrival of Netflix, Stan and Presto. It faced falling subscriber numbers at a rate of 5000 a month and bleeding money as costs escalated. It was involved in 18 instances of raising capital, according to Deloitte.
On October 4, a second meeting of creditors in Perth approved a Deed of Company Arrangement (DOCA) from Karma Media.
Under the deal, to be concluded by February 2017, Karma takes over control of Quickflix and its assets (which includes the streaming platform and a vast catalogue of DVDs) and ensures it continues to trade in Australia. It has put aside $700,000 to revitalise the company.
The Los Angeles-based Karma Media’s founder and tech/media entrepreneur Erik Pence will take over as Quickflix’s Managing Director.
Pence has a reputation for running successful digital businesses and understanding the market.
One is the Walla.la platform which allows film makers and distributors to place their content directly on digital platforms and tracks their activity.
In its bid, Karma stated it “is likely to invest additional operational funds after the initial transition period for use in building public awareness programs and planned shift in content strategy towards niche markets.”
Karma will assume certain employer entitlements. Most of the staff will be retained, and those who are retrenched will receive all outstanding entitlements in full.
Unsecured creditors will receive as much as 21.5 cent in the dollar.
Creditors include Madman Entertainment, Icon Film Distribution, Regency Media, Stan and Twentieth Century Fox Home Entertainment.
Joint voluntary administrator Jason Tracy said: “Quickflix has encountered corporate challenges and impediments in a highly competitive environment. As Administrators we have been able to continue trading the business since our appointment, reduce costs, retain value, keep employing the majority of staff, and conduct a global sale process.
“The result is a good outcome for stakeholders. Under new control, the Quickflix business will continue to trade, 24 employees will be retained, departing or already departed employees will receive all relevant entitlements, creditors will get a return and suppliers will have the option of trading with the continuing business.”
Quickflix boasts music documentaries like Nas – Time Is Illmatic, Paul Kelly – Stories of Me and Justin Timberlake – Dressed to Thrill and musicals like Greenday’s Broadway Idiot.