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QFX - Quickflix Limited

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J.Baker

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Anyone had much to do with these guys? I own 139,xxx odd shares and am unsure as to where they might be headed / what to look out for? Im still green to the market so any tips would be muchly appreciated!

Cheers..
 
I've followed QFX for a while, and have been a trial customer.........

To me, they are the perfect illustration of how to/how not to invest in an emerging industry.......

For all the blue sky and possibilities....and all the big names investors on the register.......it is been a no brainer not to own for a long time.....

The reason is that management has shown no intention whatsoever to make a profit..........they have even told the market, "we could make a profit if we want to, but that would decelerate revenue growth".........I wonder how much stock Mr Hodge owns, especially compared to what his 'short term incentive' package must be

Well, quite simply, a company with this attitude will always be taking on new 'sophisticated investors' by issuing stock at lower, lowever prices

EXCEPT for the magic moment they fund growth from operating cashflows.......when will that be?........you want to be an owner when that happens, which will mean buying just before the market attempts to price that.........

As these guys are yet to turn paper profit, growth from cashflows is still a while off...

For the record: I'm a Bigpond movies customer as I find it a much superior product than Quickflicks........but I do at least believe in this little niche
 
Anyone having different thoughts about this one after recent news? Still too little liquidity to go in with any confidence.
 
poppa said:
Anyone having different thoughts about this one after recent news? Still too little liquidity to go in with any confidence.
Click to expand...

Too little liquidity? How big is your position?

The news last week with BigPond was definitely a potential company maker. Today's news with Sony doesn't actually mean much earnings wise - how many IP enabled Sony TVs in the market? 5000? Although it is a good step away from the physical delivery of DVDs towards streaming.

But the market reaction today is definitely over-enthusiastic imo. Let's see if these guys can make some profit first...
 
Im with you on this one SKC. Added to my watchlist but won't be doing anything until I see some runs on the board...might do a bit of research in the meantime and figure out how much potential is in the economics/model of this business..
 
Looks like this thread has been dormant for a little while now. Have started looking at QFX over the last few months. There has been a significant gap in the market in Australia for a while now - Netflix has done very well in the USA in this space. Their growth in subscribers and more importantly, paying subscribers is pretty impressive.

Stock up from 8cents to 14 cents in the last month following an investment from Time Warner and continued increases their to offerings.

Does anyone have a view?
 
Just had a quick look through the investor presentation.

My thoughts are that there is quite a huge potential for this business....however as we all know - you need to spend money to make money....it would appear that QFX is in the spending stage....whether or not they can convert this into profit is yet to be seen. Jumping on board now is speculative...but with potentially large reward.
All in all the presentation didn't appeal to be overly exciting and did not really indicate that management is bursting with confidence...although thats only my first impression.
 
My two cents for what it's worth. I've been reading up on QFX and this business space is of interest to me. Having considered going into business in this area a few years ago, I've always seen a good dollar to made, but have been skeptical of the middle-age delivery methods that were prevalent in Australia.

I can see massive demand and market share for the first company to associate their brand name with this medium (as Video Ezy franchises were 15-20yrs ago).

As Rainmaker noted before:


My eye brows are raised. If we have are big networks / producers such as HBO, Sony etc getting involved.. what's their end game? The way I see it is, they could not care less if QFX ever turn a profit. QFX market reach grows significantly and thus revenue, then the producers are getting their fair share of the loot through commissions / royalties and the like..which I'm better would be a bigger piece of the pie and any profit received from dividends of growth in QFX itself.

I'll be watching this one, the risk of jumping in now could definitely be rewarded handsomely, but at the moment this company is worth $0...and it'll be pure speculation..
 
I had a look at this a while ago. My theory was/is that kiosks are done once the NBN is built. Secondly, how does a company like QFX build a sustainable moat if they move into streaming. This isn't like a video shop where I may only have once choice nearby. If they start charging more I Google "cheap streaming movies" and go to a competitor. They will competing against the lowest cost provider and it's hard to see how a small company in Australia will compete in a global market. Netflix recently got burnt when it tried to up the price on its customers and they baulked.
 
Yes, and they also have to keep the price low enough that the benefits of piracy don't outweigh the consumer's good conscience, even if there is minimal (legal) competition.
 

Gonna start sounding like a fanboy soon..

At the moment of a lot of streaming content is region locked. For example, South Park can be legally streamed online (from the official south park website) if you are in Canada/USA. You can't legally stream stream South Park from AU. Assuming the average IT user can't easily work around this (via a proxy or such), and this technology will be/is employed then this provides a regional based competitive moat. In conjunction, there is brand recognition...who says 'search engine for quikflix', you say 'google quikflix'. It is possible they can create very strong association between online streaming entertainment and their brand, if they can provide a good quality (fast streaming, high quality, immense quantity of titles which are always up to date, with a very user-friendly interface) service which is marketed very well. At the moment I have seen little marketing from their behalf which is worrying... They really need to work on that.

There is huge potential in the digital delivery..

Most of AUs infrastructure is adequate for streaming (ADSL 2+ / cable), but mobile phone wireless speed leaves some room for improvement.
 

I didn't know there was region based streaming. I'm not big into movies, which, if you saw the CV's of my family you'd find quite ironic.

Ultimately, with the growth in pirated content, how realistic, in your opinion, is it that in 5 or so years streaming will still be region based? I remember not that long ago when you would have to wait 6-9 months for new blockbuster movies to make it to the cinemas over here. At a recent conference, the head of Foxtel was pretty much saying they need to get stuff off the satellite and broadcast otherwise everyone who wants to see it has downloaded it. I can't think of the show off the top of my head but it was a sci-fi thing on 13th Street. Actually I think it was the reason they started that channel.

If things moved to being released simultaneously, then what's the point of region streaming?


While these are all excellent qualities for a company to have, they do not automatically create a moat. All of them can be replicated. Small industries, with high fixed costs and few players have the most natural moat. The region blocking may provide some competitive advantage but utlimately it doesn't stop NetFlix or anyone else from setting up a couple of servers in Australia to compete.

While it's great when a brand name becomes the verb or common noun, the likelihood of that happening is pretty remote. I haven't yet anyone say I Wotiffed it, or I Seeked it.

That's not to say they may not be profitable in the short run but over the long run I don't see how they can build a moat to give them a competitive advantage.

Aido said:
Most of AUs infrastructure is adequate for streaming (ADSL 2+ / cable), but mobile phone wireless speed leaves some room for improvement.
Click to expand...

In HD?
 
Down 60% today, ouch!

Looks like they're struggling with customer acquisition costs, not surprising given the industry (lowest cost wins). the annual report was a pretty sobering read.

SP has gone from 14c in March to 2.3c today.
 
McLovin said:
Down 60% today, ouch!

Looks like they're struggling with customer acquisition costs, not surprising given the industry (lowest cost wins). the annual report was a pretty sobering read.

SP has gone from 14c in March to 2.3c today.
Click to expand...

The bleeding edge...

It's one of those businesses that you'd say "yes definitely a growth industry" but then you quickly question "why can't anyone make money from it?". The groupon industry is another one such example.
 
I actually saw someone using one of these kiosks the other week..i was dumbfounded as to why anyone would.
 
So_Cynical said:
I actually saw someone using one of these kiosks the other week..i was dumbfounded as to why anyone would.
Click to expand...

I did! I watch may be 5 DVDs a year. I don't want to pay Quickflix $25 a month for that.

The kiosk is located right outside the Woolies where I shop. There was no line. There's another kiosk where my kid swims and I can return it there the next day.

It's quick and convenient.

Plus I still run an ancient AV system so if I stream something I need to put on a USB and hook the laptop to my TV to watch it... I know it's very early 00's. Or I have to watch on a PC / laptop rather than the TV.
 
skc said:
It's one of those businesses that you'd say "yes definitely a growth industry"
Click to expand...


Hard to get growth when each year more and more people simply pirate. Now if we were to get something more like the American original Netflix here in Australia where you could rent a(a much bigger range of) movies, tv shows, etc. online via your TV or to your PC and to many other devices vs quickflixs limitations, on instant demand for just a few dollars you would have a good chance.

But already now people are just using a VPN to get around netflix's geo-blocking and renting from them.
 
skc said:
The bleeding edge...

It's one of those businesses that you'd say "yes definitely a growth industry" but then you quickly question "why can't anyone make money from it?". The groupon industry is another one such example.
Click to expand...

It's one of those things the internet doesn't do well. If you don't have scale (eBay/Amazon/Facebook) then it's really hard to make money. These guys are selling content that about 10 other sites all are.

The piracy thing is right too. Unless I'm a massive film buff, in which case I'd probably be buying Blu-Ray rather than renting DVD's then I'm pretty happy to watch something at youtube quality. Maybe that's just me!
 
McLovin - You can actually download pirated blu-ray's now (if you have a big enough download limit - each movie is about 50gb from memory). Obviously not endorsing pirating but there is simply no way around it. I play computer games occasionally and almost every gamer has a range of shows they love and download within an hour of it being aired in america. Some local stations tried to combat this with something like the following:

"See NCIS straight from America this season, etc etc etc" and in reality it was still about a week behind the US (instead of maybe a month or more previously).

As McLovin said unless you have scale like ebay/facebook/amazon you've really got no chance. And you don't just get scale overnight unless you go about things in a way that is efficient and something nobody else does. You look at facebook, twitter, instagram, ebay - they are all about speed and efficiency.

I haven't looked at this company at all but I use my PC a lot - if you can pick the next facebook then all power too you but there are that many people out there trying to replicate it or come up with the next big thing that its nearly impossible to get onboard a winner early.
 
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