It Costs Quickflix $60 To Sign Up Each Customer

Quickflix is the closest thing Australia has to a Netflix competitor, but setting up a system to stream movies isn't cheap. Quickflix has actually been suspended from trading since mid-November while it seeks new investors. In a market update today, it revealed an interesting factoid: merely acquiring a new customer costs it $60, which means you'll have to be using its $14.95 a month WatchNow service for at least five months before it makes anything at all.

That cost largely comes from advertising, according to the statement:

Cost of customer acquisition in FY12 increased to $60 per customer from $31 per new customer in FY11 as a result of increased investment in brand and traditional media. For an outlay of $4.0 million in FY11 Quickflix acquired 130,000 trialist signups whereas for an outlay of $9.8 million in FY12 Quickflix acquired only 160,000 trialist signups.

Ouch. Quickflix has also spent lots of money on ensuring WatchNow works on a range of platforms, including consoles (the Xbox 360 and the PS3), smart TVs from Panasonic, Samsung and Sony, and tablet devices from Apple and Samsung. In the future, Quickflix says add additional device support "will be limited to those new devices with a quick payback". Apparently, one of the devices Quickflix sees as offering a quick payback are BlackBerry 10 handsets; it was announced as a major partner at the BlackBerry Jam development conference in Bangkok today.

It's generally agreed that affordable legal options are one of the few ways to combat piracy. As such, no-one in the content creation business wants to see businesses such as QuickFlix fail, but the road ahead looks anything but certain right now.


Comments

    Well now I know why why the don't let you cancel your trial online and make you call during business hours. Hoping to get a lazy few months of extra cash!

    I've trialed QF a few times, never been happy with the service for the cost.

    I find it hard to imagine they spend close to $60 in advertising per signup, i rarely see any advertising, their service was more affordable they could cut their advertising budget dramatically, using Word of mouth, offer customers 1 free month usage after a referral has been with them for 2 months, the lower cost would increase the likelihood of successful referrals.

    Can you clarify - does this mean that for each customer QuickFlix signs up they have are hit with $60 in licensing/administration/related expenses, or is this the per capita cost of their advertising and marketing?

    Maybe I'm being a bit pedantic but there seems to be a pretty big difference between the above options. If QuickFlix's userbase were to suddenly double in size, I'm curious whether that number remains the same or goes down.

      $spent on advertising / new customers gained = $/new customer

      On an unrelated note, how does quickflix streaming rate compare with iTunes 1080 HD movies? iTunes takes hours to download anything and I have 50 Mbps NBN connection. Or am I still better off buying Blu-Rays?

    Someone should give the marketing department a handbook on affiliate marketing

      Tuan Nguyen, as I live and breathe. I haven't seen you for years.

      Related to the article: I'll trial quickflix when they knock up an xbmc addon, or I buy into one of the product lines they do support. Right now the only compatible devices in my house are an ipad and an ageing XP box.

        We've met?

    Shame their service doesn't offer anything good or worth while.

    Isn't that $60 for each person who does the free trial? How many of those turn into paying customers?

    The things holding me back from Quickflix are my shitty internet connection (thanks Telstra and your pair gains!) and the lack of an app for XBMC or Boxee. I expect takeup of this sort of service will pick up when the NBN penetrates a bit further, but that's speculation, and regardless it will need to stay afloat for the few years until that starts to happen.

    it sucks that's why, on PS3 and iPad, you can only watch old movies... really... no pay per view unless you watch it on the PC/laptop.

    And the quality.. not that great. I got the free 42 days trial from Velocity, it's ok but for subcription, no thanks.

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