Amazon Buys Music Service Amie Street - InformationWeek

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Amazon Buys Music Service Amie Street

The site, popular among aspiring artists, used a pricing model that combined social networking with music sales.

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Amazon.com has acquired Amie Street, an online music service popular with aspiring artists trying to promote their works.

Amie Street announced the purchase Wednesday in an e-mail to users, but did not disclose financial terms. Amazon.com was unavailable for comment.

Amie Street said the site and its services would no longer be available as of Sept. 22 and users were advised to spend all account balances before the site was shut down. Users earned credit toward the purchase of music, based on the popularity of the songs they recommended.

Amazon.com invested in Amie Street about three years ago, but terms of the deal were never disclosed.

The site used an unusual pricing model that combined social networking with music sales. Songs started free and rose in price as more people downloaded and bought the music, up to a maximum of 98 cents. The site only garnered limited support from record labels, but was popular among lesser-known musicians, who used it as a promotional tool.

Elias Roman, chief executive and co-founder of Amie Street, told InformationWeek that the site was sold so he and his team could focus on an another startup music site, Songza, which is currently in beta. The site streams custom Internet radio stations based on playlists created by users and their friends.

Roman said the business of selling music on the web was too difficult for small companies, given the big players in the space, such as Apple, Amazon, and Wal-Mart. "The streaming space is more wide open and we thought as a startup, we could reach scale there," Roman said.

Starting Sept. 22, traffic heading to Amie Street will be redirected to a landing page welcoming the visitors to Amazon.com's music store, Roman said. Amazon.com will offer Amie Street users a $5 credit to buy music on the site. Amazon.com bought Amie Street's trademark and domain name, but not the business. Therefore, the retailer is not expected to incorporate Amie Street's business model

Amazon.com has made other quirky acquisitions. In July, the online retailer bought Woot, which sells one item a day at a discount. Founded in 2004, the site started as an employee store and market-testing site for electronics. It has since grown into several sister sites that also sell single discounted items each day. The sites include kids.woot, shirt.woot, sellout.woot, and wine.woot.

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