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A new song on AmieStreet.com is initially priced at zero cents, then is adjusted as users begin to download the song to reflect its popularity, to a maximum of 98 cents.
AMAZON EYES AMIESTREET
Digital Start-Up Offers Variable Pricing Alternative to Apple's iTunes
Apple may have a competitor after all for iTunes.

AmieStreet.com, a digital music site that prices songs of new artists according to their popularity, said that Amazon.com is leading a first round of investment in the start-up.

Started last October by three Brown University graduates, AmieStreet allows musicians to post songs with a variable pricing model determined by users.

A new song on AmieStreet.com is initially priced at zero cents, then is adjusted as users begin to download the song to reflect its popularity, to a maximum of 98 cents.

Amazon Sr. VP Business Development Jeff Blackburn said: "The idea of having customers directly influence the price of songs is an interesting and novel approach to selling digital music."

Terms of the investment were not disclosed, which included a few private investors.

Amazon has previously stated it would open a digital music store by the end of the year. So far it has announced it will sell music from EMI Group and a large number of independent labels.

Executives at WMG and other music labels have complained that songs should not all be sold at one price, but Apple has refused to budge on the issue though iTunes does have varied pricing on some albums and promotions.

AmieStreet co-founder and chief marketing officer Joshua Boltuch said the new funding would allow the start-up to expand its social networking features.

He added the company hopes to offer more services to communities that have developed on the site as fans share or recommend songs or artists to others.

AmieStreet earns most of its money from sharing revenue from music sales. According to the site, up to 70% of the price of a song or album goes to the artist. The company would not say how much music sells or if it is yet profitable.

Boltuch and co-founders Elliott Breece and Elias Roman, graduated from Brown last year and had been running the company out of their shared house in a Long Island suburb of New York, with early funding from friends and family. The new round of funding would also be used to expand their new office space and facilities.

Some months after the site's test launch, the three founders were invited to Seattle in the spring to meet Amazon executives, including founder and chief executive Jeff Bezos, to discuss how they might work together



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