Is this a cautionary tale about the limited viability of mobile TV? Nah. I think it’s just the flameout of a startup that badly miscalculated its business model, assuming people would pay top dollar (relatively speaking) for tiny-screen video clips.
Amp’d, founded in December 2005, raised more than $360 million in funding from MTV Networks, Intel, Qualcomm and others. After filing for bankruptcy in June, Amp’d sold its customer list this week to USA Telecom, a small phone company based in Maine.
Under the terms of the acquisition, disclosed in documents filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware, USA Telecom will pay between $5-$20 per month for up to 24 months for Amp’d customers (depending on their previous service plan) who sign up for service from the telco’s Prexar Mobile division. Amp’d said it had 175,000 customers at the end of the first quarter.
Even assuming Prexar gets tens of thousands of ex-Amp’d-ers to stay on — note that Amp’d cited lack of payment from customers as a key factor in its bankruptcy — this fire-sale deal is going to be worth mere pennies on the dollar of investment.
What went wrong? Amp’d COO Bill Stone, at the CTIA Wireless show in March, touted the company’s supposedly high data revenue per subscriber: He claimed that was an average of $30 per month per subscriber — about $20 of which was content purchases – compared with about $7 for traditional wireless carriers. “For us, data is not just another application,” Stone said at the time.
But that was only potential revenue. Turns out, nearly half of Amp’d’s customers didn’t want to pay for the stuff they had downloaded. By May 2007, according to Amp’d bankruptcy filings, the number of nonpaying customers totaled 80,000.
In a sad footnote, Amp’d also this week sold some furniture and odds and ends for a grand total of… $16,000. The buyer was one VoodooVox, a phone-marketing startup, which made off with 10 desks and chairs, two ottomans, six lamps, three area rugs and "two Ikea common area chairs," among other items, according to court documents.
What, no Farrah Fawcett posters?