PERTH/SHANGHAI: Quickflix, the struggling Australian video-streaming service, has announced that it is looking to acquire an as yet unnamed Chinese film and TV company to form a global streaming platform for Chinese content.
Consolidation with the Shanghai-based firm is only a non-binding memorandum of understanding at the moment, but if the deal goes ahead Quickflix said it would significantly improve its financial outlook.
The profitable unnamed company produces original content for Chinese and international markets and it also has a deal with a US studio to co-produce content, Quickflix said in a statement.
The deal remains subject to completion of further due diligence and regulatory approvals, but Quickflix said it would provide an update by August 20.
Australia, with just 25 million people, is a fiercely contested market for video-streaming services and the arrival of US giant Netflix in March this year has intensified the competition. Local players, such as Presto and Stan, also vie for custom.
Quickflix last week reported a loss of A$800,000 for the second quarter of 2015 and cited Netflix for a 13% decline in its subscription base to 107,969 people. Meanwhile, its total number of customers dropped 14% to 121,127 over the quarter.
By seeking to tap into China, a market of more than one billion people, Quickflix sees a way out of its domestic troubles and has spotted an opportunity to expand into other international markets.
"Combining the Quickflix platform, with original content and accessing large global audiences represents a significant opportunity to unlock the value of Quickflix," the company said.
Data sourced from Quickflix, ZD Net; additional content by Warc staff