by Paul Kushner
July 23, 2001
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Recent Developments
Just last Friday, Ampex, announced, unceremoniously, that it was discontinuing operations of its Internet video subsidiary, iNEXTV. In conjunction with this move, the company will immediately close iNEXTV's operations in New York City and will terminate the development of Internet video technology in Redwood City. Ampex also said it would stop making investments in its partially-owned affiliates, AENTV in Los Angeles and TV1.de in Munich, Germany. As a result, it will write off its investments in those entities completely. The decision will cost Ampex a second quarter charge of approximately $4.6 million and approximately $5.5 million to reflect other costs of closure, principally real estate leases. Apex blamed the abrupt closure on the difficulty of obtaining additional funding for iNEXTV due to “adverse capital market conditions for Internet-based companies.”
What is really strange is that as of just a few weeks ago, Ampex released news about new shows including one where Tony Guida would be hosting its “Legends Of The Road" show. On Wednesday, the company revealed it was premiering two new original, weekly, Web-exclusive health and beauty shows; “Simply Fit With Radu,” hosted by fitness guru Radu, and “The New You,” hosted by fashion expert Dex Dexter.
Analysis
Ampex has been in a sticky situation. Entertainment content on the Web has proved to be a losing proposition for many. But Ampex was one of the few remaining companies to stick to its guns of making it big. Obviously, the company decided that it couldn’t continue. Since it first announced its new move into Internet video content, Ampex’s stock price plummeted. In December 2000 it said it was recommitting the company to the content space including video syndication. Edward Bramson, CEO of iNEXTV, said at the time: “Our focus on syndication is filling an immediate and long-term need on the Internet – providing superior video content that is easily accessible as well as a marketing and advertising platform that provides results.” The news of the closure, drove down shares to an all-time low of 8 cents. Ampex closed Friday at 13 cents down 58.1% for the week.
Final Word
It’s a wonder AXC kept at it this long. Wall Street, venture capitalists and practically every publicly traded streaming media company has reversed direction from being a pure content provider. Companies today wish to be referred to as catering to enterprise customers. Those who can’t plot a change of course have been destroyed financially. Ampex is just the latest and saddest casualty. Of the few publicly traded pure video content purveyors left (Medium4.com, PayForView Media Group Holdings, and 5th Avenue Channel) you will see the sub-sector is in a death knell. You can buy a share of each of these companies for less than a pack of gum. Ampex has no doubt learned from its mistakes but unfortunately it might be too late for the company to have any residual value. By my calculations, all that is left is its intellectual property licensing department and a data systems division that no longer operates and that it has been trying to sell for over a year. If Ampex does survive, you won’t be reading about it here. Since it got out of the streaming space, that means no more coverage. Ampex is being dropped from the Streaming Media Index as of this week. So long, Ampex.
