The state of the streaming market in Australia may be about to face another shake up, as US giant Netflix reportedly eyes off Australia’s biggest player, Quickflix.
Off the back of announcing their launch in Australia, it is believed Netflix has held “serious” discussions with Quickflix about taking a strategic stake in the Perth-based business, The Australian is reporting.
According to The Australian, Netflix is interested in Quickflix because of its local content and platform deals that could be used as a launching pad into the local market.
Founder and chief executive Stephen Langsford previously told SmartCompany Quickflix was in the box seat to lead the movie streaming pack in Australia and was not concerned about competition with its US rival.
“We have HBO and Netflix doesn’t,” Langsford said . “We also offer the latest movies on a transactional basis. We see a huge growth ahead for Quickflix as we continue to focus on delivering more great content over the diverse platforms we’re already on.”
Before Netflix’s launch announcement, Langsford had told SmartCompany Quickflix was trying to gain larger traction in Australia before Netflix entered the market.
“The reality is Netflix is focussed on larger markets such as Germany and France,” he said.
But as Netflix’s move into the Australian space edges closer, a strategic partnership may now be on Langford’s mind. He was unable to be reached for comment at the time of publication.
Earlier in the week, Nine Entertainment bought an 8% stake in Quickflix. It is widely understood the move was a strategic investment by Nine in a company with an existing streaming presence ahead of its own launch of a streaming service later this financial year.
Craig White, CEO and co-founder of Australia’s other big streaming player, Ezyflix, told SmartCompany that much like the move from Nine, it is yet to be seen if any potential equity holding by Netflix would be a further “blocking” move to ward off competitors while it considered its launch, or if it represented a genuine interest to assume control and greater ownership of operations.
“With or without an equity position, news of Netflix’s imminent arrival has already seen incumbents review strategic plans and business models and has brought increased investor focus across the board,” says White.
White says if past experience with entering new markets was anything to go by, Netflix has not acquired existing businesses, subscribers, content rights, an online video platform and/or brands from an incumbent player before.
“Netflix has the core competencies in place and would already hold content rights and relationships, and/or have further access to them for the Australian market,” says White.
“While there is room in the Australian market for additional subscription video-on-demand services, it is likely that Netflix will have leadership with respect to breadth of content, and a lower cost base that would allow them to promote their service, albeit through traditional marketing means,” he says.
“In total, the online video market is very much in its infancy compared to the retail and rental markets for DVD and the time consumers spend watching linear TV, so any news is good news for online video providers.”