Amazon Backs Popularity-Based Music Pricing

By Nick Mokey August 8, 2007

Amazon Backs Popularity-Based Music Pricing

Amazon.com sees promise in a new popularity-based music download site, and the company is willing to put its money where its mouth is. AmieStreet.com, a 2006 startup that sells music with prices based on how many people like it, completed its first round of financing this week with Amazon leading the charge.

While flat-rates for MP3 downloads have worked well for sites like iTunes so far, AmieStreet challenges that model with its own approach. All songs on the site are initially given away for free, and as interest builds in them, the price goes up, topping out at 98 cents per track. The site targets small artists by giving them 70 percent of profits from their music sales, as well as serving as a vehicle for popularity.

"The idea of having customers directly influence the price of songs is an interesting and novel approach to selling digital music," said Jeff Blackburn, Amazon’s senior vice president for business development, in a statement. The terms of the investment were not disclosed.

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