Quickflix Slashes Staff, Spending
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Don Groves is a Deadline contributor based in Sydney.
Australia’s struggling online DVD rental and subscription streaming service Quickflix revealed today it has slashed staff by one-third in a restructuring aimed at stemming the outflow of company cash which averaged $A1M ($1.04M) per month in fiscal 2012. Its shares, which last traded at 5.6¢, have been suspended since November 13 while it seeks a new strategic investor or capital infusion. Quickflix, in which HBO bought a 15.7% stake for $10M in February, is burning through cash and had $2.2M in the bank at the end of September, when it had just 115,592 paying customers. HBO’s rep Henry McGee quit the board along with two other directors and chief executive Chris Taylor is leaving in March as executive chairman Stephen Langsford takes over that role. Among other cost-saving measures, the company is ceasing advertising, streamlining the organization into DVD and digital operating divisions, and lowering the cost of acquiring customers which had ballooned from $31 to $60 per customer. The company said talks are continuing with Australian and international investors, it has retained investment advisers in the U.S., and it expects to provide an update on funding arrangements next week.