Presto to shut down; Quickflix sold to US investor
Australia’s streaming sector went through a major contraction this week with the announcement that Presto will close in January, while Quickflix has been sold to a US investor.
A joint venture between News Corp-owned pay-TV service Foxtel and Seven West Media, Presto has been lagging behind both Netflix and Stan in the streaming wars, with only an estimated 200,000 subscribers.
Foxtel announced this week that it has bought Seven West’s shares in Presto and will merge the streaming platform’s offerings with its IPTV service Foxtel Play.
Existing Presto subscribers will be transferred to Foxtel Play in December, when the IPTV service is being revamped with new packages and pricing.
“We are delighted to be able to offer Presto subscribers access to the new-look Foxtel Play, which we know will be highly attractive to them,” said Foxtel CEO Peter Tonagh.
Presto’s ownership came into question in September when the Australian Competition and Consumer Commission (ACCC) released a statement of issues about plans for Ten Network to acquire a stake in Presto and for Foxtel to buy part of Ten.
Meanwhile, Quickflix, which entered voluntary administration in May this year, has been sold to US-based Karma Group, headed by Eric Pence, for $1m. Pence said he would invest a further A$700,000 to keep Quickflix operating.
Quickflix administrator Jason Tracy said: “Quickflix has encountered corporate challenges and impediments in a highly competitive environment. As administrators we have been able to continue trading the business since our appointment, reduce costs, retain value, keep employing the majority of staff, and conduct a global sale process.”
Since launching in May 2015, Netflix has become the market leader in Australia, with an estimated 1.9 million subscribers, followed by Stan, which is jointly owned by Nine Entertainment and Fairfax Media.
Stan has added to Quickflix’s woes by sitting on its redeemable preference shares in the company, which prevented Quickflix from raising fresh capital. The shares were transferred to Stan after Nine Entertainment acquired HBO’s stake in Quickflix in July 2014.