Subscription Video-on-demand (SVOD) provider Quickflix has now been acquired by US-based Karma Media Holdings, with the latter taking control of the Quickflix business and its assets in exchange for a payment of AU$1.3 million. The agreement provisions are scheduled to be completed by early February next year.
With the entry of Netflix in the Australian market, Quickflix and other online DVD rental companies in the Australian market not only saw a deep decline in their monthly subscriber numbers but also in their revenues. Quickflix entered voluntary administration earlier this year.
Deloitte Restructuring Services partner Jason Tracy, who was appointed joint voluntary administrator in May, said the agreement offers the best outcome for Quickflix’s creditors, its staff and customers.
The result is a good outcome for stakeholders. Under new control, the Quickflix business will continue to trade, 24 employees will be retained, departing or already departed employees will receive all relevant entitlements, creditors will get a return and suppliers will have the option of trading with the continuing business,
she said in a statement.
Unsecured creditors will be receiving as much as 21.5 cents in the dollar, there are 201 trade creditors and 47 employee creditors. The company announced earlier this year that it would be closing down its offices in Sydney and Auckland, cutting down costs at the Perth office, “insourcing” its customer care, and trimming down delivery network charges.
To sum up, Quickflix will continue operations, will retain a “majority” of jobs, and employees who are dismissed will receive full entitlements.
Tech and media entrepreneur Erik Pence will lead Quickflix as the managing director. Karma will be investing $700,000 as additional operational funds after the initial transition period for use in building public awareness programs and planned shift in content strategy towards niche markets.
Quickflix CEO Stephen Langsford had previously expressed that the company has lost so much ground to its competitors that it is now turning its focus towards launching into the technology and e-commerce service sectors.