Australian broadcaster Nine Entertainment Co (NEC) has acquired HBO’s 8% stake in local DVD rental and VOD operator Quickflix.
NEC is understood to have paid just under $1m for all of HBO’s redeemable preference shares in Quickflix. Simon Kelly, NEC’s chief operating officer, told The Australian that the shares were an opportunistic financial investment and declined to comment on whether its goal was to launch an all-out takeover of the Perth-based company.
HBO spent A$10m on its stake in Quickflix in 2012 after signing a licensing agreement with the company.
Quickflix’s customer numbers declined in 2012 and 2013, but improved in the first quarter of 2014 to almost 120,000. The company reported a $4.2m loss on revenues of $8.6m for the six months to December 31, 2013.
NEC is planning to launch a VOD service of its own later this year, under the project name Stream Co. Initially, NEC was working with rival broadcaster Seven West Media, but is now going it alone on the project.
Australia’s nascent VOD sector has become a hive of activity with Netflix rumoured to be entering the market next year and several local players, in addition to NEC, planning streaming services.
Netflix executives were in Sydney last week to negotiate Australian and New Zealand rights to film and TV content. Pay-TV operator Foxtel, jointly owned by News Corp and Telstra, launched VOD service Presto earlier this year.
HBO has a long-term exclusive agreement with Foxtel, which broadcasts its original series on its pay-TV platform before they move to streaming services. Although Foxtel is the dominant pay-TV player in Australia, it’s only present in around 30% of Australian homes.
Seven West Media and Ten Networks are also expected to launch streaming services, and Australian exhibitor Dendy is launching a service, Dendy Direct, next month. However exhibitor Hoyts recently shelved plans for its VOD service for at least the next few years.