Amp’d raises $67 million, gets music industry backing

MVNO Amp’d Mobile has raised $67 million in financing for the launch of its new data-heavy youth-targeted wireless service, Amp’d officials said this week. The funds have come from a variety of venture capital groups--Columbia Capital, Redpoint Ventures and Highland Capital Partners,--but the biggest eye-popper in the list is music industry titan Universal Music Group.

Amp’d, the brainchild of Boost Mobile founder Peter Adderton, is billing itself as an ultra-hip, technology-savvy wireless provider that will target the young adult market using a bevy of content and applications delivered over Verizon Wireless’ CDMA 1x EV-DO network. In doing so, the company has been assembling partners from game suppliers to ringtone distributors to boost its content portfolio. The addition of a major record label to its investor roster, however, may give an edge in dealing with the fickle music industry. With the exception of ringtones, mobile music has yet to take off in the U.S. despite the growing popularity of music downloads in Europe and Asia.

“Amp’d is leading the way in developing exciting opportunities for 3G mobile technology for young people,” Universal’s chairman and CEO Doug Morris said in a statement. “Because Amp’d Mobile will be a key player in the global entertainment market for 3G applications, we decided to invest as well as provide content for the service.”

Amp’d said it plans to provide a robust music portfolio for its customers including music and videos from Universal’s stable of artists, including a direct connection to Universal’s International Music Feed, but the yet-to-launch operator did not provide any details as to whether it would allow direct download of music to the handset or just select content streams. The difference could be crucial, as downloadable music has scored a windfall for companies like Apple, while music streaming has yet to have much of an impact for the wireless providers that offer it.

One hint to Amp’d plans is its dual fixed-wireless strategy. Company officials last month said Amp’d will pursue a PC as well as handset content strategy, allowing customers to swap content between their broadband-enable computers and their EV-DO phones. With digital music well grounded on the PC, Amp’d may be looking to extend those capabilities to the on-air terminal. At a keynote speech at the BREW Developers conference in June, Amp’d Chief Marketing Officer Don McGuire said that Amp’d thought of itself as a mobile entertainment company not as carrier and being such it would avoid the carrier’s mistakes of trying to program content for its customers.

“Can the wireless industry really compete with media, music and games devices?” McGuire said. “Wireless veterans are not entertainment programmers. We have to think from an entertainment industry perspective.”

Amp’d also hinted that it has broadened its initial target segment through changes in its marketing literature. Amp’d originally stated it was targeting the 18- to 24-year-old crowd with its service scheduled to launch this Christmas. But suddenly its target demographic has changed to 18 to 35. Perhaps 25 years old aren’t so unhip after all.