criterion (australian) and insider(the age), page-24

No comment on the quarterly as it has little impact on the big picture.

Look at other industries with similarities that are further along the line in terms of digitisation. In music we went from CDs to the iTunes store. In books we went from paper to the Kindle. What you notice is that the companies that have been successful in the internet stage are global companies with global reach and global scale.

If I suggested investing in Dymock's because they were going to release a Dymock's e-reader with online store you'd all laugh. Same as investing in Sanity because they were going to create a competitor to the iTunes store. How can a tiny Australian company compete with global companies when our population is 22mil? What possible competitive advantage could a small Aussie company have over global players when the product is delivered over the internet? We certainly haven't seen signs of it yet in terms of music and books. Maybe this time is different?

I think investors have got it right in that streaming will be the way we watch movies in the future, but I don't think QFX is the right way to express this idea. Before Steve Jobs passed away he was pretty confident he'd come up with a game changer for TV, the Apple TV that everyone is waiting to see (Not the set top box, but an actual TV). Its pretty clear Apple will have an offering in the future and its only a matter of time before Netflix arrives. What is QFX's competitive advantage then?

I'd bet on Amazon or Google in this space before QFX even though they have no current offering simply because they millions of user accounts and credit cards and have global scale.

Once the movie studios realise that there is no going back to the good old days and commit seriously to online streaming, can you really see all the movie studios dealing with a couple of tinpot companies in every country like the video shop days or do you see a couple of global players?

What do investors use for their music and e-books?

To anyone considering shorting this, I wouldn't. I could easily see dumb money (traditional media, an ISP) buying this as a cheap and easy entry to the industry and making the same mistake the newsletter writers have promoting this stock.