Quickflix hires Chief Marketing Officer and foresees growth for the online rental/digital sector
The online rental company appointed Hannah Schwartz (RSVP.com.au, realestate.com.au) to this new position to drive subscriber and revenue growth.
The appointment is part of the company’s strategy to dominate online distribution in physical and download formats in Australia.
Executive Chairman Stephen Langford told Encore that Quickflix has experienced growth at a time when video rental stores and DVD retail sales are declining – a trend identified by a recent report by analyst IBIS World.
Although the Australian Video Rental Retailers Association (AVRRA) sustains that video stores have experienced six years of continuous growth, Langford believes traditional stores don’t have such a brilliant future.
So with this new blog how are we to differentiate between press releases and actual news? This is clearly a press release its so sugary and vomitous with no analysis whatsoever. However it sits in the same section as the news – giving it the same level of importance as the actual news. Not really a respectful way to treat your readers.
Hello James. This is not a press release and only about four lines are based on material provided by Quickflix. It is an actual interview in which Langsford does talk about his company and their strategy, but what he says about trends in the home entertainment rental sector is quite real and relevant.
If you want the Encore analysis, yes, online rental is winning over traditional stores -with Telstra’s service and Quickflix leading the way – and yes, we foresee that slowly, broadband penetration will allow Australians to consume higher volumes of content online, the way other countries are already doing.
Both Telstra and Quickflix are in a position where they can capture a broad customer base before downloads become a standard, because they’re building it upon the still popular physical formats (DVD and increasingly, Blu-ray). iTunes will also play a big role, but its movie/TV sales are still low compared to the revenue generated by physical formats.
And finally, Quickflix are not Encore advertisers.
Hi Miguel .. I really do wish Quickflix the best, but no, online rental isn’t winning over traditional stores. Look at the revenue .. Quickflix quarterly $1.83 million = $7.32 million per year. The average video store takes $400k* per year which leaves Quickflix with the equivalent of …. 18.3 local video stores. Ok. Lets increase that to say 60 local stores to represent the entire mail-order industry. Well … theres 1500 other local stores out with the math saying that diverting only 3% of customer spend, mail-order isn’t changing customer behaviour at all. Any analysis of Quickflix is tainted with the outstanding success of Netflix in the States – but that’s a different market with the strongest mail system in the world (not too mention return-mail pickups).
Traditional rental is rationalising as it finds itself in an era where local DVD rental is no longer the only choice for home entertainment. But the industry is far from dead, and the next few years will generate a big shakeout as local rental learns to get smarter because they can’t afford the overheads (namely space) they used to operate in. The obvious opening is for kiosks to enter the mix (as they are doing with a vengeance in the states), and smarter ways of trading as I have setup with http://applebox.com.au. You are right, the name of the game is building a customer base and transitioning them online .. but the future is far from decided!
Cheers,
Simon
APPLEBOX Founder
* and rentals only -http://www.insideretailing.com.au/Latest/tabid/53/ID/7262/Video-stores-not-dead-says-report.aspx
Thanks for your contribution, Simon. I suppose another point that should be made is that traditional rental is evolving in its offering and operations, and the ‘war’ has not yet been won by any side.
Great that Miguel’s article has sparked this discussion.
Without doubt traditional rental stores (Video Ezy, Blockbuster, Civic etc) represent the largest segment of the movie rental market. But its in decline and we see that decline accelerating just as they have done so in the US and UK.
Quickflix is an emerging online brand… we guess that 9 out of 10 Austalians don’t really know about online DVD rental let alone Quickflix as the leading brand in that segment. Even so our subscribers grew by 50% in 2009 and January 2010 has been our strongest month yet for new customers. That growth was in contrast to what we understand was a flat trading period for traditonal rental. When Quickflix started in 2004 it took us 6 months to reach 500 subscribers– we regularly do that in day now.
As reported Quickflix is investing in marketing, content and product innovation which will accelerate growth further. More subscribers joining Quickflix means more word of mouth and more subscribers….and the whole virtuous cycle of a growth business that is investing more in content, innovation and of course attracting more subscribers and winning market share.
The success in the US of online DVD rental continues to be a leading indicator for Quickflix and we’re very excited about that- Australia lags the US in uptake of ecommerce but the gap is closing . Simon from Applebox talks about the quality of the US mail service and pickup from letterboxes-Australia Post is next day delivery into all our major markets and happily benchmarked against US mail. Online DVD rental has also taken off in the UK- no mail pick up service from letterboxes there!
The reality is consumers like Quickflix because we have a massive range of titles, great ways to search and discover what to watch including personal recommendations, member reviews and ratings and a convenient delivery service and good value subscription plans that get rid of late fees and due dates….and we’ll continue to listen to our members and make the service better and better.
We love the Quickflix brand and support we get from our growing fan base… stay tune for some exciting times ahead.
Stephen Langsford
Founder and Chairman, Quickflix
thanks for your contribution, Stephen.
by the way, how does everyone feel about options like Oovie, who just had their 1,000,000th rental?
Hi,
Will be interesting to see how oovie go –the one millionth milestone is a key one, Quickflix past its 7 millionth in about the same time in the market. DVD kiosks in the US have been around for a long while and certainly Redbox has taken off post the GFC and their buck a day rental. Rental growth in the US last year was wholly attributed to online DVD rental (Netflix the leader) and kiosks (Redbox the leader) taking market share from traditional rental stores (Blockbuster) and retail (which decline 18% in 2009).
Redbox has several of the content owners well and truly offside with their cheap overnight rentals with some studios withholding latest release titles– the studios don’t like their commoditisation of the DVD.
Kiosks have a place in Australia. Obviously there are some drawbacks– their carousel only has capacity for 300 or so DVD — so the range is very limited and quality control is variable (someone returns a scratched/dirty DVD and it might go out to the next customer 5 minutes later. I don’t think oovie is stocking Blu-ray. Also obviously you still need to return it to the kiosk and late fees accumulate for each night you have it out. But they do provide convenience if you’re close by to a kiosk and they’re cheaper than a rental store.
We’re happy to see kiosks sit alongside Quickflix– ultimately we have almost 40,000 titles with roughly 80% of our demand in the long tail which kiosks don’t service. The online selection, personal recommendations and home delivery also provide some strong advantages of Quickflix over oovie.
Probably the major conumdrum is that kiosks are not a logical path to digital download and streaming– this is the long term game in our view and as an online business Quickflix is very excited about.
Thanks again
Stephen
Quickflix