Amie Street, DRM Free Music Store

Amie Street Logo Amie Street is an online music store and a social network service launched in July 2006 by three Brown University graduates Elliot Breece, Elias Roman and Joshua Boltuch(picture included) and provides a promising new way for artists to get exposure and promote their music. Amie Street aims to be able to deliver the best new independent music with the most convenient, relevant and affordable service possible.

A Unique Business Model

Amie Steet allows you to discover new songs and new artists without a big dent in your wallet. At Amie Street, artists upload tracks onto the site. The price for each song starts at zero. Yes, each and every song offered as a FREE download when uploaded onto the site. Artists upload their music directly to the site in mp3 format at whatever quality bitrate they choose. Based on an initial observation, most of the tracks seem to have the 128kbps bitrate.

Amie Street uses an algorithm to determine song prices based on demand where the price of a song rises according to increased demand for the song. So the more a song is downloaded, the more its price will rise. At the same time, the maximum price any song will rise to is US 99c which is a good bet to be the most popular song available. I did a quick check at prices and did not see anything higher than $0.70 at this point of time(Spinlight City from Miami). This community based pricing model according to Joshua Boltuch, keeps songs affordable, more organized and easier to find, while also being a seamless promotional tool for musicians who enjoy the snowball or bandwagon effect.

They are also trying to get more publicity by integrating a social network element into a business model where they drive each other. Users are able to create a profile, make friends and provide recommendations to them. You can tag an artist with relevant terms, send the artist a message, post to a message board, email the songs to friends and also promote the group by embedding a song on your MySpace page. You can also embed a Meebo window for IM chat right on the user page.

Amie St also actively solicits bands of all genre and continue to keep adding music to the site. Currently, Amie Street has a Catalogue of over 1000+ artists and a database of more than 10,000 songs.

Amie Street Frontpage

Upsides

1. Customer loyalty is rewarded: Initially, every song uploaded to the site is free and if a user recommends a song at this time, they are compensated. Users get 1 REC for every $1 they use on the site. Also, RECing differentiates more popular music from less, as songs that are believed to be good will be RECed more often.

2. Users can preview a song before they purchase any with the previws ranging from 45 seconds to over a minute.

3. Being DRM free, when you download a song, you have unlimited copying and burning privileges. Also this means you can play your MP3s on any player including the iPod.

4. Partnership with Inclue, a Firefox extension RSS reader that outputs to Outlook or Outlook Express. This sends promo tracks to inboxes of Amie Street users allowing them to sample songs using Outlook and Firefox.

X-Factor: Amie Street’s business model is letting the market put a value on the price of music and visa versa. The perfect web 2.0… power to the people. Eric Olson thinks this might be a music industry disruption when he said

Music labels may fear this type of pricing model because it throws some uncertainty into the mix. Specifically, it hampers their ability to determine how much they will make from a certain recording. Enter market pricing. Now labels don’t know what their product will sell for let alone if the artists will even be well received

Downside:

1. Amie Street is not the first in the world of internet startups such as Audio Lunchbox, purevolume and Garageband. The problem with such indie websites is that they might fail to attract a wider audience beyond a MySpace genre user. Previous experiments on such a business model have not been entirely successfull. Time will tell if Amie Street provides a better experience and is successfull in attracting a wider user base.

2. Limited number of artists and labels. I expect this problem to go away as word about AmieSt spreads and becomes a favored destination among independent artists.

3. On Amie Radio, the player will cycle through all the songs in that genre and does not play the full song even ones that are still free.

Sources of Revenue

The price curve of the songs uploaded at the site changes based on the overal volume of songs purchased on the site. As users buy songs, after the first 5 dollars in sales, the artist is credited with 70% of the proceeds of the sale with the remainder 30% going to Amie St. Its users are compensated when they ‘REC’ a song which they believe will be a hit and earn free download credits when they recommend music to friends.

Investors

As of January 27, 2007, the company is in the process of raising a “Series A” round of venture capital funding. The company is angel funded with the most notable angels being Robin Richards of MP3.com fame.

Overall, I am in love with Amie Street’s business model. The artist gets to keep the most money and also obtains valuable exposure at the same time. The visitors at Amie St also get to listen to new tracks for free or a rock bottom prices, a much cheaper option than that available at the iTunes Store. They certainily don’t lack in traffic as the Alexa Chart shows us below. It seems like the TechCruch article on them definitely gave Amie St a lot of exposure.

Amie Street stats on Alexa

Amie Street definitely provides us with a central online location to discover and listen to new independent artists, all without breaking the bank. It provides great exposure to artists and the return of 70% of sales to the artists is unmatched in the music industry. I personally think Amie Street is positioned perfectly to make a huge push into the online music industry with their innovative solution and much better than say suing your listeners.

Additional Links

1. An Interview with Joshua Boltuch of Amie Street by CenterNetworks. Includes Background info on Amie St, where the name came from , competitor information, video etc.

2. Sample MySpace site of a user with Amie Street bands

3. TechCruch’s updated review of AmieStreet