Amazon Invests In Dynamic Pricing Model For MP3s

NittanyTuring writes "Amazon recently closed a Series A financing deal with Amiestreet.com, a startup selling DRM-free MP3s with a demand-based pricing model. All music starts out free, and prices increase for popular tracks. Jeff Blackburn, Senior Vice President for Business Development, Amazon.com: 'The idea of having customers directly influence the price of songs is an interesting and novel approach to selling digital music.' What does this mean for Amazon's own intentions to sell music?"

Comments

This could work really well

[uncreativeslashnick]

Have you ever found yourself telling someone, "yeah, I liked that song before everyone else thought it was cool." I can see this model encouraging people to explore and download and try new stuff so that later on, when the price goes up, they can brag about how they downloaded it first, for free, before it was selling for $5 a pop.

It also might open the door for more quality indies to actually make money. People might be turned off by high prices of what the RIAA cartel marketing is pushing, and go for the cheaper indie stuff. Then again, I am probably being too optimistic, as most teenagers will pay any price for "cool"

Might this help the long tail?

[Otis2222222]

I'd like to see a model like this. Ever since I installed a satellite radio receiver in my car, my musical horizons have broadened significantly. A lot of the artists I hear on some of the more obscure channels aren't indexed on iTunes or even available on illegal services like Limewire. This mostly applies to older music that is out of print, or never made it to CD.

It would be nice if there was a service like this that had just about anything ever recorded digitized and made available for download. Let the market sort out what's popular and what isn't, but give us access to EVERYTHING.

In this day and age, there is no reason why virtually every album ever recorded isn't available to buy a digital copy of.

Re:pissed off customers, thats what it means

[yali]

As demand drives prices up, the incentive to illegally copy MP3s will increase; but large-scale infringement would lower demand. So eventually (at least in theory) the prices will hit some sort of equilibrium point. This could be a pretty interesting natural experiment.

Re:Novel idea

[innerweb]

I may be way off base on this, but if I remember correctly, this is starting to sound like free market economics (supply and demand). As demand increases, so does price. In this case, supply for each individual song for practical purposes is infinite, so they will have to use an *adjusting* system to manage price. It solves several problems if done correctly.

• It allows new artists to be exposed without the risk to the consumer of buying music they hate. No risk means more consumers will try it.
• No DRM means I use the music where and when I want.
• The market will be used to determine the price of the music. That may be the sweetest part of this deal.

At the risk of being redundant (on slashdot?), CDs are a dead medium. They are very expensive compared to digital downloads. They force bundling of musics that are not desired by the majority of people. They are fragile (heat, nicks, etc), though better than tape. They require an immense infrastructure (compared to digital files) to distribute. They make as much sense anymore as tape or vinyl did a few years into the age of CDs.

Those in the industry that learn how to grapple with this will survive and thrive. Those who do not, like so many other players in other industries before them, will die.

InnerWeb