Market Insight

Oz online rentailer launches digital streaming service in NZ

May 01, 2012

David Scott David Scott Associate Director – Research and Analysis, Service Providers & Platforms
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 Australia's largest subscription-based online DVD rental service, Quickflix has launched its digital streaming service in New Zealand. The WatchNow streaming service is available via a range of internet-connected devices including smart TVs, Blu-ray Disc players, game consoles, PCs, tablets and smartphones.

The New Zealand subscription based 'all-you-can-eat' service is priced at an introductory rate of NZ$9.99 ($7.90) per month for an unspecified period. By comparison, the Quickflix streaming service in Australia, which complements the company's online DVD and BD rental service, is priced at A$14.99 ($15.49) per month for new subscriptions, or A$7.00 ($7.25) per month for existing online rental video subscribers.

Founded in 2003 and publicly listed since 2005, Quickflix increased its total subscriber base by 50% to just over 120,000 in the year to end March 2012. Of these, almost 13,000 or 11% were trialists, a substantially higher proportion than is the case for Netflix or UK-based Lovefilm. Paying subscribers grew 68% to almost 108,000 over the same period. 

Quickflix's streaming service in New Zealand faces fierce competition from pay and catch up TV services alike, particularly those from leading pay TV operator Sky Network Television and incumbent telco Telecom New Zealand respectively. Data caps, which have historically limited the digital distribution model in New Zealand, must also be overcome. Quickflix will be hoping more ISPs offer unmetered content for its users after Orcon and Slingshot announced they will not charge for data related to the Quickflix service from May 2012.

Quickflix's international expansion will also be boosted by a recent injection of capital funding in the company and a growing list of content providers. US premium cable television network Home Box Office (HBO) invested A$10m ($10.3m) for a 15.7% stake in Quickflix after receiving shareholder approval in late March 2012. The investment follows Quickflix's content licensing deal with HBO, a wholly-owned subsidiary of Time Warner, in January 2012. Despite this deal, HBO content is unavailable on the Quickflix's New Zealand streaming service due to HBO's exclusive content licensing agreement with Sky Network Television.  

However, Quickflix continues to build its content library. The company entered agreements with Metro-Goldwyn Mayer Studios (MGM) and BBC Worldwide Australia (BBCW) in March 2012 and ITV Studios Global Entertainment in April 2012 for their content to be supplied over its digital streaming service. Under agreements, subscribers have access to film content from the MGM catalogue including titles from Goldwyn Entertainment, Orion Pictures, PolyGram Filmed Entertainment and United Artists as well as television content from BBCW. ITV Studios' television content will be available from May 2012. The agreements add to a range of other content deals Quickflix has signed with major local and US content owners since the company added online streaming to its Australian offer in October 2011, including NBC Universal, Sony and Warner.

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