Direct digital movie streaming is big business.
The world market leader, Netflix, had more than 25 million subscribers at the end of June with a share price that peaked at $US287.73 mid-July.
On Wednesday, Australian online movie rental company Quickflix launched its digital movie streaming service in a bid to stake a claim in the local market.
Quickflix CEO Chris Taylor said the company was taking the Netflix business model and approaching it with a fresh set of eyes.
On the day of the launch, he was keen to emphasise differences between the local company and the major player in the US because when Wall Street closed the morning of the Quickflix launch, the Netflix share price had plunged 35 per cent.
The Netflix news arrived at an inauspicious time for the fledgling local provider, but Taylor believes the fate of the US company has nothing to do with Quickflix.
“Netflix’s woes have come out of bad execution, not out of bad business,” Taylor said.
“They started at a price that was uneconomic and they were always going to have to lift it.
“One could argue that was mismanaged.”
Quickflix will offer premium subscription bundles and pay per view services for “absolutely new releases”.
The company already operates an online movie rental subscription service that has a catalogue of more than 50,000 films.
Subscribers to the new movie streaming service will be offered a sweetener while the business finds its footing: free access from November 10 until the end of 2011.
The digital streaming side of the business is still in its infancy and will launch with fewer than 1000 films on its catalogue. The aim is to have 1000 films available by Christmas. Three hundred will be programmed per month on a rotating basis.
Quickflix has signed deals with five major studios including Sony Picture Television and Warner Bros International and are working to nut out the details with other content providers.
Taylor said the company intends to also provide television content and films produced by smaller studios.
“We’ve started at the pointy end of Hollywood, but we will be programming premium subscription packages that will appeal to niche interest areas,” he said.