The streaming wars have claimed their first victim, with homegrown Quickflix going into voluntary administration.
The Perth-based streaming service, founded 12 years ago by CEO Stephen Langsford has today appointed Ferrier Hodgson as administrators and blamed Channel 9 and Fairfax for its demise.
“Despite Quickflix being first to the streaming market and holding a leadership position in 2014, ongoing growth has required capital for continued investment in content and marketing.
“Neither Nine Entertainment nor Stan have ever participated in any capital raisings to assist Quickflix’s growth and its ability to raise capital from any source has been constrained,” the company said.
Stan Entertainment, which is owned by Nine Entertainment and Fairfax Media held redeemable preference shares in Quickflix, and was often a barrier for the company to raise new capital.
Originally, the redeemable shares were issued to HBO as part of a $10 million investment. Included in that was a condition where the owner of the shares were to be paid $10 million if anyone tried to do a full takeover of Quickflix.
Finally though, after 3 years of no buyer, the shares were sold for $1 million to Nine in 2014.
However with Nine launching its own streaming service, it tried to defend it by stopping any attempts for the company to restructure. Quickflix says that Stan would only accept the restructure if it was paid $4 million in cash (which Quickflix didn’t have), or make a payment of $1.25 million plus transfer all its customers to Stan, while also removing itself from competition with Stan.
“In the first instance, Quickflix does not have the funds to make payments to Stan, nor does the company believe it can raise funds from investors for that purpose,” Langsford said.
“Neither alternative leaves Quickflix in a position to fund its unsecured creditors nor with capital necessary to take the business forward.”
Quickflix’s New Zealand business is not going into voluntary administration and will be operating as per usual.