Quickflix still in the RED
Quickflix have posted their 2007 first quarter results to the ASX. You can download the pdf here. The guts of it are:
- incomings were $1.29 million
- outgoings were $2.23 million
- quarterly loss was $1.34 million
So, 4 years in, and still in the red. They are working hard to get cash flow positive with a $963,000 spend on brand building and marketing (that’s 75% of first quarter revenue). This shows their biggest challenge - getting visibility. How do you get in front of people? For Internet-only companies this is tough. Some have achieved it (think Amazon), but for others it will be a long hard push. With APPLEBOX at least I have people walking past, coming off the train and eating at the Bean Counter. Local retail gives visibility that pure web plays can only dream about - but then Internet plays give distribution that local retail would dearly love :-).
By my count, Quickflix have taken $3m at their IPO + $5m this year. Plus private funding to get Quickflix up initially (lets say $1m), thats $9 million to take the company to a rental community of 21,000. Hmmm… I wonder what sorta community 10 APPLEBOX stores might generate? All online, all primed for a future of digital content delivery. Time will tell.
November 2nd, 2007 at 3:03 pm
Not mention word-of-mouth. This, combined with the train/retail/Bean Counter aspects you mentioned, give you the one-up on retailers like QuickFlix.
November 2nd, 2007 at 8:58 pm
November 14th, 2007 at 11:51 pm
Hi Simon,
I’m becoming a regular poster to your blogs. OK, to put this into perspective– yes, we are making a considerable investment into establishing our brand and positioning in a $2Billion retail/rental market. If we take into account consumer spend in cinema, free to air and PayTV the market potential is well north. There are over 5million Australian households with a DVD player and with access to the internet. So the opportunity for us is large, particularly if we do a better job of satisfying customers than our nearest rival Telstra BigPond Movies (which we believe we are doing).
Today, as the leading independent online movie rental company, Quickflix has a base of over 20,000 subscribers and a total online community of approaching 200,000. We deliver movies ALL over Australia. We’ve also experienced strong growth and expect that word of mouth from our existing base of happy subscribers will drive exponential growth and as a consequence build a strong succesful company with loyal following.
The old way of going down to the big-chain video store is giving way to a better, smarter and more satisfying way of watching movies. We think that’s Quickflix, but the best way is for your readers to trial it themselves at http://www.quickflix.com.au.
Cheers
Stephen
November 16th, 2007 at 1:01 am
Hi Stephen,
You’re always welcome! Even with a cheeky pitch at the end there ;-).
I’m interested in your 200,000 strong community. If someone isn’t subscribed, I guess the 200,000 are unique web visits or possibly newsletter mail outs? That seems stretching it a bit if they are considered community when they visit your site, but can’t engage in community building behaviour. Eg, reviewing movies, creating lists, interacting with each other?
Yes, the Australian video watching market is big. However, changing consumer behaviour whose renting habits are largely satisfied is HARD. And if 5 million households are 5 million traditional store memberships, they must be educated about alternatives, convinced the alternative is better and then transitioned over. Your marketing spend is probably a good indicator of that. Ramp it up, educate people. There’s no other way. The beautiful distribution potential that Quickflix has, is also one of the biggest drawbacks because you’re not in people’s face when they go shopping. Gotta get their attention some other way, and you can’t even advertise your service from a phone bill! (P.S. I do hope you trounce BigPond Movies
) Perhaps this is a tipping point for you? I’m keeping watch, and as soon as I see break even in your financials, I’ll be blogging about it! But there’s no hiding that it hasn’t happened yet.
And yes, I’m more than happy for my customers to give you a shot. In fact, I gave you a go a while back to see what it’s like - and whilst there is something nice about having a DVD turn up on my doorstep, mail-order viewing has both its advantages and disadvantages. Weigh them up - it’s APPLEBOX for me!
Cheers,
Simon
November 17th, 2007 at 1:19 am
Hi Simon,
Yes the 200,000 receive our regular latest release and special feature emails and have access to our movie reviews and member ratings (with have over 1m ratings). You’ll shortly see even more community features. On another score Hitwise has for some time now consistently rated Quickflix one of the top entertainment sites based on website traffic.
Getting in front of people is what it is all about. Our joint venture with Australia’s largest retailer Woolworths assists but so do the tie-ups with have with Hoyts, Optus and others. But as we all know the best way to spread the word is through satisfied customers referring our service to their freinds and family– we estimate 40% of our signups coming through word of mouth.
Foxtel spent +$billion to get to profitability and now is powering along. Quickflix can get there much sooner.
Ok, enough from me. Let consumers make their choice.
Cheers
Stephen
November 17th, 2007 at 8:42 pm
Hi Stephen,
I just thought I’d let you know that whilst working in store the other day I gave a customer your business a plug as she was not local to this area and hated her local dvd store. She decided it would be good to use APPLEBOX’s browser to do her browsing and making shortlists and then order through Quickflix. So our first hybrid customer is born!
Sarah Gilligan
APPLEBOX Evangelist
November 18th, 2007 at 8:47 pm
Hi Sarah,
Many thanks for that– we really appreciate it. Movie selecting and watching behaviour is changing and its exciting to be part of it and I’m sure you’re also finding the same.
Great job title you have there!
Cheers
Stephen
November 20th, 2007 at 2:59 pm
Thanks….sums me up well I think!
Sarah