The latest shake-up in the emerging media streaming market in Australia sees Foxtel and Seven West Media’s Presto and local ASX-listed player Quickflix get into bed together.
Foxtel has done a deal with Quickflix to distribute of Presto, extending the reach of its video-on-demand streaming service to Australians still using DVDs.
For Quickflix, this means it can continue to offer DVDs on subscription and premium video on demand content for an extra fee but gradually drop its general all-you-can-eat streaming content which will be replaced by Presto’s offering.
This will reduce costs for Quickflix and Presto will gain a new market of viewers who are still to move from DVDs to streaming.
The DVD market is estimated to be worth more than $1 billion a year.
Quickflix CEO Stephen Langsford would not reveal the commercial terms of the agreement with Presto and a start date has not yet been finalised.
“This agreement will significantly bolster our content offering for existing and future Quickflix customers whilst improving our overall operating economics,” Langsford said.
Quickflix is expected to make considerable savings by dropping licensing of general, non-premium streaming content.
Langsford says Quickflix customers won’t have to do anything. The transaction to Presto streaming content will be seamless.
“Our subscription content streaming deals will transition to streaming replaced by the Presto content,” Langsford told Business Insider from Los Angeles where he is in talks with Hollywood studios. “We will continue transactional streaming licensing deals direct with studios and we will be adding to that.”
Profits have been elusive for Quicklflix, a pioneer in offering DVD and streaming media via subscription. The local service saw its losses more than double to $8.592 million for the half year to the end of December.
Quickflix had 136,670 customers at the end of December. The number of paying customers was 117,106, a 15% increase over the previous twelve months.
Quickflix and Presto (Foxtel and Seven West Media) are two local players in a battle to gain market share in Australia against US streaming media giant Netflix which launched here in March.