Lachlan stakes $594,000 on DVD rental site

Lachlan Murdoch

Lachlan Murdoch, the son of News Corp chairman Rupert Murdoch, has made his first major foray back into business since leaving the family firm last year.

Lachlan, 34, bought a 10 per cent stake in Quickflix, an Australian online movie rental site. The company's shares surged 40 per cent to A17.5c on the news.

Lachlan, who quit News Corp last year, spent more than A$500,000 ($594,840) on the stake. The purchase was made on Friday on the ASX through his private company Illyria, Quickfix managing director Stephen Langsford said.

Langsford, 44, said his Perth-based company aims to emulate California-based Netflix, the world's largest provider of movie rentals, with a market value of US$1.26 billion and more than 5 million subscribers. Quickflix is valued at A$7 million and has almost 10,000 customers.

"Obviously Lachlan would understand the success of Netflix in the US," Langsford said. "The online DVD rental service model is one that's experiencing great take-up in the US and Europe."

Quickflix's founders and internet music provider Destra Corp each own 10 per cent of the company, and institutional investors hold the rest, Langsford said.

At News Corp, Lachlan was publisher of the New York Post and was groomed to succeed his father. He unexpectedly quit in July 2005 and moved to Australia with wife Sarah and son. He founded Illyria in August last year. Lachlan signed an agreement not to compete with News Corp in the media industry for two years after departing.

- BLOOMBERG