Competition for DVD rental by mail in Australia essentially just disappeared. Telstra's BigPond Movies division is selling its rental business to rival Quickflix, and will stop postal rentals after September 30 2011.
Telstra wants to concentrate on direct download of movies instead, via its T-Hub and through PCs. Quickflix has talked up its plans to offer downloads — the obvious future for movie rentals, especially in a post-NBN universe — but doesn't yet have a product.
When I tested Quickflix earlier this year, I found that slow delivery speeds by mail were the biggest problem. In its announcement to the ASX, Quickflix says that buying out Telstra's inventory will ensure it can offer "next-day delivery in all major cities". It will be interesting to see if that happens — and also if Quickflix can become a profitable business when it's the only game in town.