By Brendan Swift
Quickflix's annual net loss increased by 46 per cent to $3.07 million after strong growth in subscriber numbers was outweighed by higher marketing and new content costs.
The company, which mails out DVDs to subscribers but plans to also offer digital downloads, is one of several companies vying to replace traditional DVD retail outlets.
"During the year Quickflix pursued subscriber growth and market share, significantly increasing its marketing activities and investment in content; and expanding its executive team," the company said in its results announcement.
"The result was that total subscribers (paying and trialists) increased by 68 per cent to more than 55,000."
While Quickflix's revenue lifted by 11 per cent to $7.12 million its marketing costs jumped 57 per cent to $2.34 million. Trial service costs (the company offers a one month free trial to new customers) almost doubled to $955,409.
However, total subscribers increased by 68 per cent to 55,367 although almost 16,000 are on a combination of free and paid trials.
Quickflix, which raised $650,000 in new capital last month, now offers 42,000 DVD titles, including more than 1,000 on Blu-ray.
It is not the only company pursuing new distribution strategies.
DVD kiosks such as Red Room DVD and Oovie are carving out a market niche. Meanwhile, major rivals such as Telstra's BigPond Movies and Foxtel, and multi-purpose home entertainment units such as the TiVO and Sony PlayStation 3, are also now offering movie downloads.