Beyond the Crystal Set

Quickflix backing Destra online movies pilot from Media Day 11-14 May 2007

DVD provider Quickflix has been convinced to accelerate its broadband movie plans and will soon start promoting a pilot online download service launched by Destra.

A strategic shareholder in Quickflix, Destra plans to gauge the appeal of internet downloads by offering a range of content through online properties including DestraMovies, MP3.com.au and NiceShorts. Content will be sourced from Magna Pacific, the local film and DVD distributor it acquired in March.

A noted sceptic of online downloads in the current operating environment, Quickflix CEO Stephen Langsford said the company was happy to promote Destra’s pilot to its 16,000 subscribers. He has previously said Quickflix will launch a low-key online delivery play late this year but doesn’t anticipate any significant uptake or revenue for several years. Langsford said yesterday, “with a flourishing online community, the time is right for Quickflix to partner with like minded organisations to test VOD so we are ready to offer a complete service when it’s commercially viable.”

Destra CEO Domenic Carosa says the movie pilot will run over delivery platforms used for its existing music download services. Notes posted on the DestraMovies beta site promise the delivery of a 841MB movie file in 435 minutes at 256Kbps, 218 minutes at 512Kbps and 36 minutes over standard cable. Files are coded for a 24 hour viewing period.

While trumpeting the addition of new accessibility options and content choice for consumers, Carosa played down the potential for any imminent takeup boom. “We don’t expect significant revenues until there is sufficient and cost effective high speed broadband in Australia, however we believe it’s important that our customers can start experimenting with online video downloads,” he said.

Destra also currently provides white-label music download services for the likes of Harvey Norman and JB Hi-Fi and has been rumoured to be pursuing a similar strategy for movies. Carosa gave no indication of those plans yesterday.

ReelTime director chooses the farm over new media struggler from Media Day 8 May 2007

Former Network Ten CEO John McAlpine has resigned from the board of ambitious new media start-up ReelTime Media. says improved conditions on the land make the time right to get back to his farm in southern NSW.

One of ReelTime’s founding directors, McAlpine has been seen as one of its key advisors. The former Ten Network CEO also brought an element of old-school credibility to an online media business that has todate struggled to make an impact with consumers.

ReelTime has just secured $3.9 million in new funds from Sony Pictures Television, which it hopes will boost its public profile and deliver it with the custom it needs to survive.

At the same time McAlpine says the drought has broken at home, meaning he has no time to devote to download movies. “With the breaking of the drought I now have to devote most of my free time to my farm at Adjungbilly to ensure we take advantage of the recent rains,” McAlpine said. He didn’t speculate about the widely publicised water shortages in the Murray River catchment where Adjungbilly lies. ReelTime Managing Director John Karantzis said he respected McAlpine’s decision.

Meanwhile, ReelTime is making good on international expansion promises and preparing for a New Zealand launch next week. Karantzis pitched the New Z

ealand move as another means to expenditure-free revenue growth. He says the service will rely entirely on existing infrastructure and require no launch capital.

On the content front, ReelTime’s initial New Zealand offering will be restricted to certain unspecified content for which it has trans-Tasman distribution rights, including that from NBC Universal. “Progressively over the coming months, more studios will be added to the New Zealand service as New Z

ealand rights are finalised,” Karantzis said.

ReelTime’s New Z

ealand offering will offer movie and TV content under both download to own and download to rent models. The company hopes to build site traffic and replicate an advertising-supported content model soon to launch in Australia.

While it has struggled to perform in Australia, ReelTime has made no secret of its international ambition. The company has already secured a license to provide on-demand content in Singapore and is also believed to have evaluated opportunities in Malaysia, Thailand and Taiwan.

IceTV see ReelTime as natural VOD fit from Media day 7 May 2007

While planning the launch of its own video-on-demand service by mid-year, IceTV has confirmed the integration of its Electronic Program Guide with ReelTime Media’s new digital set-top-box.

As revealed by CommsDay, IceTV’s EPG is one of a number of service additions that ReelTime hopes will increase the appeal of its fledgling home entertainment service. The company has struggled to grow its initial movie and TV program download service and has now expanded with the settop- box and new business models, including physical product delivery and advertising supported content.

IceTV General Manager Matt Kossatz says users of ReelTime’s Home Entertainment Centre will be able to schedule and record free-to-air TV programs, either from their TV screen or online. The company sees VOD as a natural compliment to its Personal Interactive Media Planner service and is now in the final stages dealing with content partners ahead of a launch. Where PIMP users are now able to record TV programming, they will soon be able to download movies and other content.

ReelTime’s HEC will provide online access to ReelTime’s video download outlet as well as a digital TV tuner, DVD player, CD player and VHS recorder. With 160GB or 320GB of storage space it will have capacity for up to 700 hours of video content. ReelTime is currently taking orders for delivery this month.

Prime takes 15% of Destra from Media Day 30 April 2007

Regional broadcaster Prime Television has emerged as a key strategic investor in Destra taking a 15% stake in the digital media company and assisting it facilitate the proposed acquisition of DVD distributor Magna Pacific.

Prime will invest up to $10.4 million of equity into the company which will fund its expansion relating to production, advertising and cross-selling of content. The funding infusion has given the Destra the green light to take over independent DVD distributor Magna Pacific, with the two parties signing a binding Scheme Implementation Agreement on Friday.

For Prime, the stake follows the broadcasters intention to develop its own digital strategy and focus on leveraging its existing assets and brand into new media opportunities.

Prime’s chairman, Paul Ramsay said “we believe that Destra have developed a unique and highly attractive business model in the digital marketplace which will represent an important component of Prime’s digital strategy in the future”. He added that the Prime’s free to air distribution of TV, radio as well as online content was highly complementary to Destra’s core capability in licensing, producing and building communities around such content. Prime CEO Warwick Syphers is expected to join the Destra board following the initial placement.

Under the deal Prime will initially invest $7.3 million upfront to acquire 28 million destra shares at 26.0 cents. The upfront investment, which gives Prime a 13% stake is expected to be completed next week. Following the acquisition of Magna Pacific, Prime will acquire a further 12 million shares at 26 cents for a consideration of $3.1 million taking its stake up to15%.

Destra chairman Carl Olsen, said that the capital injection provided by Prime would give Destra the financial flexibility for current and future funding requirements such as the proposed acquisition of Magna Pacific and other potential bolt on acquisitions.

Under Destra and Magna’s binding Scheme Implementation Agreement, which will be sent to Magna shareholders within four weeks, Destra proposes to acquire all issues shares at $0.38 cash or 1 fully paid Destra ordinary share and $0.15 cash at the election of each Magna shareholder.

Destra is bidding against Lionsgate for the asset which has offered shareholders 32 cents per share. The directors of Magna have unanimously recommended that shareholders vote in favour of the Scheme and reject the offer by Lionsgate Australia.

Natalie Apostolou