Quickflix seeks to keep Netflix out of NZ and Australia
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Quickflix upgraded its online payment system in three months to prevent hacking threats and solidify its position as a leading digital video subscription service in Australia and New Zealand, the company's chief innovation officer, Tim Parsons, said yesterday at the CeBIT Future of Payments conference in Sydney.
Quickflix is a subscription service that ships DVDs and Blu-ray movies, and streams digital video in Australia. It launched a streaming service in New Zealand in May this year. In 2011, Quickflix began adding streaming video support for smart TVs, Sony PlayStation 3, the iPad and other consumer electronics devices, and it has plans to soon support the Microsoft Xbox 360.
"We're trying to move as fast as we can because we're scared of these other big competitors and we're scared of people like [the US company] Netflix ... who might be coming to Australia," Parsons said. "We want to make sure that when they turn up they realise we're in all the key devices in the premium positions--contractually agreed with those device manufacturers--and have all the different pieces in place like PCI compliance ... so they say, 'That's not really worth it.'"
Quickflix hopes to follow the example of Trade Me in New Zealand, which successfully warded off a challenge from eBay, Parsons said. He said everyone thought eBay would "crush them", but "eBay took one look at the local Trade Me business and [said], 'Too hard, we're out of here".
In upgrading its payment system, Quickflix hoped to ward off threats to its business, including technical, operations and hacking threats, he said. "We recognised that we weren't really super comfortable" about preventing an event like the one Sony faced when it lost tens of millions of credit cards. "That's a brand that's pretty bulletproof, but if Quickflix lost two credit cards we'd probably be gone."
Quickflix partnered with IP Payments to develop payment gateways for various devices and the Web, Parsons said.
Maintaining a consistent look and feel to payment gateways across the Quickflix website and device apps was critical to making customer comfortable, he said. For device apps, the challenge is doing that on "someone else's infrastructure," he said.
Also, the migration process had to be "completely invisible" to the customer, Parsons said. The company has 100,000 paying customers, "and we just didn't want any of those folks" to receive a "weird message" telling them that they had to upgrade their account, he said.
Complicating matters further, the company had to migrate multiple credit cards per user and support multiple currencies.
"We pulled it off" in three months," Parsons said. Quickflix started talking about the upgrade in November 2011, decided to do it in March 2012 and rolled it out by June. The company has run 600,000 transactions since turning on the new system and migrated 180,000 cards "without any downtime," he said.
The company's upcoming move to Xbox 360 presents new payment challenges, Parsons said. "Xbox 360 won't have on-device payment, but it has all sorts of opportunities like that in it, and of course customers who sign up through the Web for an Xbox 360 account need to be able to transact using that PIN system for [transactional video on demand] and other products." That will run on off-site IP payments and credit card storage infrastructure, he said.
Quickflix has convinced 30 per cent of its DVD-through-post subscribers in Australia to switch or additionally subscribe to streaming services, Parsons said. "What will push people over is catalogue depth." Quickflix has 55,000 titles in its DVD catalogue but only a subset are available through streaming. "There's a lot of legal relationships" to cut through in Hollywood and studios are "good business people," he said. "You've got to be careful, because they'll take your money. So you need to make sure your business model will scale, so if you're paying more money for the content--as in millions of dollars--you need to make sure you'll get it back at the other end."
Another problem is each major studio has "lots of little ones underneath it that are actually doing the delivery of the files," Parsons said. "In some cases we get tapes. In one instance we were told, 'Rip the Blu-Ray.'" It's an industry that's "still in transition," he said. "They're being very careful to protect their existing revenue base ... and at the same time they realise they have to come up with something very credible."
Posted by Anonymous at 15:26:31 on October 23, 2012
- refuse to acknowledge that they simply DO NOT have the first idea about what is involved with running a business, let alone one on such a scale as NetFlix or QuickFlix
- there's the 'economies of scale' - compare a total population of 4.5million in NZ vs 314.5million in the USA from which to cover initial business overheads and then derive profit
- then there's the exchange rate: US$9 / month becomes NZ$11. Until we're flying the stars and stripes from The Auckland Harbour Bridge, that's not going to change (and I hope it never does)
- yet some people will complain about having to pay NZ$14 / month for a local service
Personally, I haven't even bothered to look at NetFlix or QuickFlix - my initial experience on the AppleTV was simply that download speeds on the outer edges of Auckland's North Shore are just too painfully slow. But then that doesn't bother me - in NZ we have so much to do that I don't really need to bother couch-surfing :)
Posted by justanothernoob at 9:01:58 on October 23, 2012
The content is old and nothing (and i mean nothing) is in decent video quality or in 5.1 - if you are going to charge the same as video ezy at least have a similar product!!
People spend all sorts of money on home theatre and blu-ray only to have half-a*sed content delivered is not good enough.
Posted by MIke at 8:46:46 on October 23, 2012
Posted by Anonymous at 9:16:16 on October 22, 2012
Posted by Anonymous at 1:03:05 on October 21, 2012
They didn't have much tv when they launched, but they have a hell of a lot more now.
Also, quickflix does at least have recent movies on pay per view, like the avengers or men in black 3. Netflix even in the USA doesn't have those.
I use it on my iPad, ps3 and Samsung tv. It's awesome.
Posted by Billy bob at 21:47:11 on October 19, 2012
A comparison between Quickflix, NetFlix and Hulu shows Quickflix to be the poorer cousin regarding both viewing choice and ease of use.
If the pricing was competitive then I would support and only support Quickflix as a regional initiative. However , as with Sky once competition is shut down consumers are left with but one regional choice.
New Zealand and Australia need to stop protecting own turf as this smacks of anti-competitiveness to the detriment of the client. What I want to watch online needs to allow me to subscribe to a range of entertainment channels where choice is offered and where I can decide on value for money.
Posted by Patrick at 14:43:15 on October 19, 2012
It is about 'content' first for early adopters and the content was just not there.
Quickflix was just too limited. Seemed like a good idea at first glance and better than the inflexibility of Fatso.
I wish them well.
Posted by Steve at 17:23:30 on October 19, 2012
NETFLIX DOES - 2.2 to 4.xx!!
Look forward to Netflix's entry into the market!
Posted by Brianew at 12:24:50 on October 19, 2012
$21 to watch one movie hardly rates as a convenient cost effective option to watch a movie - it's a pity it cost me $21 to find out
Posted by Hugh Lloyd - 021611477 at 9:58:43 on October 19, 2012