"As a result of our rapid growth, our back-end infrastructure was unable to keep up with customer demand. We are taking this step as a necessary and responsible action to sustain and strengthen our momentum in the market place."This has to be one of the first times I've seen a company file Chapter 11 for reasons including rapid growth and demand exceeding supply.
My ignorant opinion into their situation is that this is a technology problem. My bet is cost didn't scale to revenue as it applied to licensing carrier network bandwidth. This should send a ping of caution out to other "closed shop" long tail mobile entertainment vendors: Carriers hold the key to Unlimited Mobile Entertainment and companies like AMP'd cannot compete.
No matter how you look at this technology, AMP'd must effectively build their delivery platform on the back of carrier networks. They are hostage to regional discrepancies in wireless bandwidth costs, which again is in the hands of the carrier. Their product offerings are constrained to the carriers network capabilities. Further, they compete against a plethora of mobile application vendors who will put in the technical effort to build applications and provide carriers with a white labelable solution to split revenue on. These companies will automatically gain a customer with every carrier subscription and hence could very easily grow AMP'dish sized user bases in a relative time.
I don't want to jump back into advertising but the truth is entertainment content (EX// TV, Radio, Newspaper, Magazines) is largely subsidized by advertising which AMP'd doesn't do well. This has and probably always will be the key to distributing entertainment content and until AMP'd can balance ad revenue and subscription revenue against human and network costs - I seriously doubt they will ever be a big player.
Simply put, digital entertainment consumption is increasing so quickly that even the Carriers do not have the hardware to supply demand - so how is a company like AMP'd going to do it? And in mobile, 10 million users isn't much - plus mobile advertising just doesn't have the payout like on the web.
I think this is a sign of bigger problems with the AMP'd model. Another discrepancy of their press release stated:
"Amp'd Mobile's senior management team remains largely intact as we continue to focus on improving and scaling our backend infrastructure."Yet this statement was followed by the announcement that (by mocoNews.net):
"Peter Adderton, the embattled CEO of the now-in-Chapter-11 MVNO Amp’d Mobile, has left the firm as CEO. He is still on the board and is still the largest individual shareholder. The company is going through Chapter 11 bankruptcy and the management overhaul is to be expected."Somebody somewhere needs to get their story straight. In this case I have to think its AMP'd that isn't fully disclosing the truth.
The big question is: What Carrier will Buy Them?, or is it What Carrier would buy them!??
I'm just glad that I'm not their big investor.
Over and Out
P.S., I wonder how many Canadians didn't appreciate the way Amp'd directed users to it's Canadian site (see below). I personally don't appreciate the words they used. I'd like it if the Canadian site had a link to the American site using some stereotypical Americanism like Fat Capitalist Pig, War-Mongers etc. If you are a business and you are going regional with your web properties, at least respect the region you are doing business in - don't see pig meat to the Taliban. I'd say this is a fundamental, and the CEO should get fired for this oversight. It's such a simple business procedure: don't piss your customers off. Nice Work AMP'D, Nice Work
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