19/10/2007 - 16:46

Letter: Quickflix responds to video stores claims

19/10/2007 - 16:46

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Letter to the editor

 

I was interested to read the views of the president of the Australian Video Rental Retailers Association,
George Kafataris, regarding his views of the online DVD rental market "Video stores rebuff online DVD
service claims", October 17.

What was most interesting about his observations was the fact that the so-called "shortcomings of the model"
that he identified, are in fact some of the key reasons that an increasing number of Australians are
subscribing to online rentals through company's such as Quickflix.

Mr Kafataris suggests that the "choice" of movies available is one of the shortcomings and with services like
Quickflix, Bipond Movies and Big W Movie Rentals each offering only about the same number of titles as
three large video rental stores.

We at Quickflix know that our subscribers use our service because it gives them access to more than 27,000
movie and TV series titles - many, many times greater than what is available in the video store. The
claim that such numbers would be available at three stores is simply incorrect and in any case the fact
remains that a video store member can only access the stock of the video store they belong to!

He also goes on to say:

"A 'use it or lose it' subscription model that asks you to pre-pay for a movie service you may or may not
use - particularly if you are busy or away on business or on holidays."

Wrong - The fact is the Quickflix service is flexible. Quickflix customers have a choice of plans to suit
their lifestyle and can cancel, change or suspend their subscription at anytime without charge and
because there are no due dates or late fees you can watch the movie whenever you are ready.

"You have to return these movies by post before you get any more, which means that if you don't post
them back early enough in the week for them to be processed you're likely to end up without any movies
to watch on the weekend."

Wrong - A special feature of the Quickflix website allows our customers to tell us when they have sent
back a DVD, by simply ticking a box. We don't wait for the DVDs to arrive before we send the next title in
their queue.

No guarantee of receiving your first or even second choice of movie, requiring customers to be happy
with what they get.

Wrong again - The Quickflix service is all about personalisation. Members add movie, documentary or
TV series titles to their queue based purely on their personal preference, so if the first one on their list is
not available for any reason, they are still guaranteed to receive a title they actually do want to watch.

And finally, one of the other reasons that we are seeing an increase in subscriptions, which surprisingly was
not identified by Mr Kafataris, is that our members do not face the risk of late fees.

Yours sincerely

Stephen Langsford

Chief Executive Officer

 

Below is the statement from the Australian Video Rental Retailers Association and the original statement from Quickflix:

Internet-ordered, post-delivered DVD rental services cannot guarantee consumers the movie titles they want on the day they want to view them because of an imprecise movie reservation system and reliance on postal deliveries and returns, according to the Australian Video Rental Retailers Association (AVRRA).

Unlike your traditional video rental store, where you can reserve a title by phone or walk in and select exactly what you want to view for that night or weekend, Internet stores cannot guarantee exactly which titles from your movie preferences will be posted to you.

"It is an unsatisfactory reality of these new delivery formats," says AVRRA president George Kafataris.

"The way it works is that you pre-pay on a monthly basis to get one, two or three DVDs at a time. You have to return these movies by post before you get any more, which means that if you don't post them back early enough in the week for them to be processed you're likely to end up without any movies to watch on the weekend," says Kafataris.

There has been a lot of hype about new delivery formats, but not enough transparency about entrenched pitfalls for consumers. According to AVRRA, these include:

- A 'use it or lose it' subscription model that asks you to pre-pay for a movie service you may or may not use - particularly if you are busy or away on business or on holidays. In comparison, video stores offer a 'pay as you go' service and offer $1 movies and other deals daily;
- Lack of immediacy in receiving movies because of the reliance on postal services that don't operate on weekends and public holidays; and
- No guarantee of receiving your first or even second choice of movie, requiring customers to be happy with what they get.

"There is also a misinformed perception in the marketplace that new online stores deliver a huge choice of movie titles to consumers," says Kafataris.

"The reality is that services like Quickflix, BigPond Movies and Big W Movie Rentals each offer only about the same number of titles as three large video rental stores. And what use is a large catalogue if you can't get the movie you want when you want to watch it?"

 

The full text of a joint company announcement is pasted below

Big W and Quickflix have officially switched on a joint online DVD rental service Big W Movie Rentals that is 10 times bigger than a traditional video store and boasts Australia's biggest movie rental library.

Movie lovers accessing the website will be able to choose from more than 27,000 films, TV series and documentaries, which will be sent to them in the mail by Quickflix. In stark contrast to traditional video stores, people won't be hit with expensive late fees because there are no due dates for DVDs.

The launch comes as new research, conducted by Galaxy on behalf of Quickflix, showed Australian consumers had owed video stores at least $85 million in late fees. More than 20 per cent of Australians had incurred video store late fees of almost $20 with up to 250,000 people racking up to $100 in fines at any one time, according to the research.

Quickflix Chief Operating Officer, Simon Hodge, said the Big W service was the first time a large Australian retail chain had offered DVD rentals online and would be extremely attractive given the absence of late fees.

"With consumers being forced to pay many millions of dollars in late fees, the new Big W and Quickflix service provides a strong alternative to driving to a video store to be faced with limited choice and hefty late fees," Mr Hodge said.

"Consumers can access a DVD library that is more than 10 times bigger than a video store without the need to leave the comfort of their own home to select their favourite titles."

The service works with customers adding a selection of titles to a personalised queue on the Quickflix website. Up to five DVDs will be posted at a time, depending on the subscription plan. Customers simply return DVDs in a pre-paid envelope and new titles will be dispatched from their queue.

Subscriptions range from $9.95 per month per month through to $56.95 per month. The number of movies you canreceive will depend on the subscription plan. For example, a $36.95 per month plan will provide unlimited DVDs which are sent three titles at a time.

Big W Home Entertainment Merchandise Manager, Charles Davey, said Big W Movie Rentals has made it even easier for customers to watch their favourite DVDs at home with the new online service.

"With Big W Movie Rentals customers can access the latest new releases, chart topping successes and a huge back catalogue online, they won't necessarily find in store," Mr Davey said.

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