Bucking the overall economic trends and those of other media and entertainment companies, DVD rental company, Quickflix (ASX:QFX) delivered 12% year on year revenue growth and cut operating costs by 17%.
While the company is yet to deliver an operating profit in its five years of operation, the operating margin has improved substantially over that time and the market opportunity is clear.
Subscribers increased by 24% to 37,000. Uptake may well increase even more quickly if the current legal “case”:http://www.computerworld.com.au/tag/AFACT%20v%20iiNet around the illegal downloading of movies finds in favour of the movie industry and rules that ISPs have a liability to act against copyright infringement. At that point Quickflix is also well positioned for the legal IPTV delivery of movies.
Data from the US shows that 12% of households are using online DVD rental, rising to 21% in the San Francisco bay area, a statistic that Quickflix, no doubt, hopes to emulate locally. If the Australian market followed suit it would suggest a potential market of 1,000,000 subscribers.
Quickflix has a market capitalisation of $11M and is currently trading at 6c.
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