Australian video streaming service Quickflix has today announced that they have called in administrators after talks with rival streaming service Stan broke down.
Quickflix was one of the first ‘big’ streaming video services in Australia, and were announced as an initial launch partner for the Google Chromecast launch back in 2014. Since then the introduction of streaming video juggernaut Netflix, as well as Australian streaming services Presto, and more importantly Stan have seen their market share slip – to a point where their financial position has become untenable.
In a statement today, Quickflix announced they have announced Ferrier Hodgson as voluntary administrators.
The crux of the matter is the existence of redeemable preference shares (RPS), shares which were initially issued to HBO as part of a $10 million investment. The existence of these shares, which carry a condition that they be paid out if anyone attempted a takeover of the company has been a barrier to Quickflix raising new capital. The sale of the shares to Nine Entertainment in 2014 however sealed the deal, leaving Quickflix with an $11.7 million hole in their balance sheet.
Quickflix has attempted to renegotiate the terms of the RPS with Stan, which saw Stan requesting Quickflix ‘pay Stan an amount of $4 million in cash’ or pay $1.25 million in cash as well as transfer all of their streaming customers to Stan. This has led Quickflix today to advise:
As these negotiations with Stan have not been successful and the majority of potential new funders have specified the restructure of the RPS as a condition of providing capital, the Company has no other realistic alternative but to appoint voluntary administrators.
As Stephen Langsford, CEO & Founder of Quickflix says ‘Neither alternative presents a viable option for Quickflix’ leaving the company with little choice but to call in administrators.
Moving forward, the administration should not affect existing or new customers as yet, with administrators advising that the business will operate ‘as usual’. This administration doesn’t affect the Quickflix New Zealand business either, which is a subsidiary and is not in voluntary administration.