Troubled SVOD operator Quickflix has been having a tough time this year. While the arrival of Netflix and Stan and Presto has been good for competition, it's also meant that the SVOD pioneer has been struggling to make money, launching scheme after scheme to remain relevant.
After going into a trading halt to restructure back at the end of August, yesterday the company sent out an update to shareholders on how plans are progressing.
The good news is that there has been progress. The bad news is that, all things considered, it's still going to be a massive battle to claw back market share, based off the announcement.
Out with the bad
The first part of yesterday's announcement was the restructuring of SVOD debt. It has reached an agreement with one licensor for the release of approximately $2 million of debt, and has negotiations underway to release another $4 million with other studios.
That's all good news, because debt is bad (mmkay). But the other way to reduce your debt is cost saving, which Quickflix has done by cutting 20% of its staff and reducing those costs by 33%.
Other cost cutting measures will bring in further savings, with everything from call centre support to executive board overheads going through the wringer.
All up, Quickflix reckons it will save about $4 million a year via these cost reductions.
In with the good?
Of course, cutting costs is only half the battle. Quickflix needs to try and make money to turn its fortunes around, and in order to do that, it needs new revenue streams.
According to the announcement, Quickflix has "reached an agreement to enter affiliate arrangements with SVOD operators in Australia and New Zealand". This will allow the company to make a small percentage from signups to a complimentary (but still rival) SVOD platform.
The obvious inference here is that Quickflix is taking our advice and pulling out of subscription services entirely and focusing on its DVD mail service and premium video on demand platform.
The safe money is also on that SVOD platform being Presto, following the previous Quickflix plan to resell the streaming platform.
We'll find out more when Quickflix releases its outstanding 30 June 2015 annual financial statements, whenever that may be.
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