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Dendy and Nine Raise The Stakes in Australia’s Online Video Sector

HONG KONG – Independent cinema chain Dendy is to launch a VoD service next week in Australia. The move follows shortly after TV giant Nine Entertainment took a A$1 million stake in existing VoD platform QuickFlix.

Dendy Direct will kick off on Aug. 6 with up to 1,000 films provided by ABC Commercial, Beyond Home Entertainment, Entertainment One Australia, Icon, Madman Entertainment, Pinnacle Films, Roadshow, Transmission, and Umbrella Entertainment.

It is expected to be a pure VoD service with no subscription required. Individual titles can be rented for A$5.99 for a standard definition movie and A$6.99 for one in HD. It will be available on PC, tablets and mobiles immediately, expanding to Samsung smart TVs and Google Chromecast later this year.

Dendy has some 2% of Australia’s theatrical box office and will market the new service to 65,000 Club Dendy members and its 100,000 newsletter subscribers.

It joins an already crowded space which includes QuickFlix, iTunes, Google Play, EzyFlix and Fetch TV. Australia’s leading exhibition chain Hoyts was also expected to launch an online video service, but dropped that ahead of a possible IPO this year. U.S. market leader Netflix is considering plans to launch an Australian service in 2015, but already has an estimated 200,000 Australian subscribers who subscribe to its U.S. variant and who use VPNs to beat geo-blocking technology.

Keeping Netflix at bay may well have been a motivating factor behind Nine’s move to acquire the stake in Quickflix that was previously held by HBO. The convertible preference shares are equivalent to 8% of the ordinary equity and news of the deal sent Quickflix’ stock market listed shares soaring by some 40%.

Quickflix has some 120,000 clients and lost some A$6.4 million in 2012-13, and a further A$4.2 million in the first half of 2013-14. It recently raised A$1.8 million of fresh capital through a share sale.

Nine, which has diversified interests beyond broadcast TV and is considering launching its own VoD service, was not the only player in talks with Quickflix. Other that have had partnership discussions reportedly include News Corp Australia and Seven Entertainment.

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