The death of Amp’D

The death of Amp’D

It was only in April, CEO and Founder, Peter Adderton proclaimed, “Amp’d is creating the best mobile media experience on the market, hands down, and our continued success is due in large part to the unparalleled strength and talent of our management team.” The company announced that their subscriber mark is approaching 200K, ARPU was $100/month, data ARPU was $30.

It had some big name investors – MTV, Qualcomm, Intel, and 50,000 others.

But the company shuts its lights on Tuesday.

What happened? In the short duration of a quarter, company went from boasting on top of the hill to another statistic of failures.

Amp’D played its part in the ecosystem but upping the ante on user experience, pushing the business models, tried to become a brand but didn’t really focus on the business basics – don’t spend more than you have. It kept on spending like a drunken sailor with unlimited resources even when it was struggling to add subscribers. While the company boasted of 200K subs and high ARPU, the churn was enormous. Too many hotshots on the management team, too many investors – in the end, nobody was in control, there was no strategy. While the data ARPU was $30, they were losing money on sourcing and content production. What good is a $30 ARPU if there is no profit. Amp’D pushed the limits so it can attract and retain customers. While its brand building efforts are laudable, the company failed at simple math. The cost of building a brand while acquiring subscribers without money in the bank is a recipe for disaster.

Can the death of Amp’D help us show the light for Helio and others? To some extent, Helio is like Amp’D though with some governance of their parents but the company has been spending like crazy as well with the hope Earthlink and SKT will keep pouring money. It doesn’t bode well for them either. They have to control costs, focus on the basics and customer service first, world domination later.