Quickflix’s new agreement to resell Presto Movies and Presto TV could be a game-changer for the company which launched in 2003 and has yet to make a profit.

Subject to due diligence and new funding arrangements, Quickflix will replace its $10 a month streaming service with Presto’s content, significantly strengthening its film and TV offerings.

It’s also a win for Presto which will get access to Quickflix’s far wider distribution network which includes smart TVs, X Box, Sony PlayStation and other game consoles.

The deal will “bolster our content proposition and improve our overall economics,” Quickflix founder/executive chairman Stephen Langsford told IF.

One advantage is that Quickflix will no longer have to pay significant minimum guarantees that are standard for SVOD deals.

In the quarter ending March 31, the SVOD and online DVD rental service saw a 6% increase in paying customers to 123,553. However its churn rate rose to 8.5%, up from the 12-month average of 6.6%, as some customers defected to the new competitors.

Quickflix incurred a net cash outflow of $850,000 on revenues of $5 million in the quarter.

Shaun James, Director of Presto and Video on Demand, said, “Quickflix’s decision to resell Presto follows its strategic review of key players across Australia’s streaming entertainment landscape.

“It reinforces Presto’s unbelievable range of premium content backed by our leading marketing and curation expertise. We’re confident Quickflix customers will be delighted once they can experience the Presto service.”

Langsford said the deal will entail a major upgrade to Quickflix’s user interface to integrate Presto’s content and said the funding arrangements for the upgrade are confidential.  Presto is not taking an equity stake in Quickflix.

He would not give a launch date for the resale arrangement or reveal pricing, beyond indicating it will be in the coming months. Nor would he forecast how many extra subscribers he expects to sign but he observed, “There is a lot of upside in the streaming market.”

Quickflix will continue to offer pay-per-view movies and TV series from suppliers including Disney, Sony, MGM, Warner Bros and Lionsgate, and Langsford hopes to sign further content deals.

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