In a sign of Telstra's growing confidence in the video on demand (VOD) business model, it has signed a deal with Quickflix that will see it refer BigPond Movies DVD customers to the Australian DVD rental service.

Quickflix will make a variable payment to Telstra based on the number of customers who transfer, and will also acquire BigPond's library of DVD and Blu-ray discs and equipment.

Telstra has advised its customers that it will close the DVD rental service of BigPond Movies on 30 September 2011.

Last week Telstra’s director of IPVT, Ben Kinealy, said the company had experienced a period of strong uptake in Telstra’s on-demand video service. According to Kinealy some 1.5 million movies had been purchased and downloaded via Telstra’s T-Box alone since the device was launched in July 2010. The latest reported figures for the number of T-Boxes sold was 120,000 as at February 2011.

“That number is impressive and it shows this is a real business,” he said.

Stephen Langsford, Quickflix founder and executive chairman, said “We are delighted to enter this agreement with Telstra and look forward to delivering a great service for BigPond Movies DVD customers who choose to continue with DVD rental."

Quickflix aims to become a major entertainment brand in Australia and attract a million customers within five years.

Louise Duffy | 04-07-2011