Amazon pumps investment into DRM-Free music site

Raising its bet on digital music, Amazon is reportedly backing startup AmieStreet.com, which attempts to blend digital music sales with social networking features by pricing music based on its popularity among visitors to the site.

"The idea of having customers directly influence the price of songs is an interesting and novel approach to selling digital music," Jeff Blackburn, senior vice president for business development at Amazon, said in a statement.
The site breaks with the flat pricing plan used by Apple’s iTunes Store, by featuring a variable pricing model where a song starts free, but as more and more people download it, the price steadily rises up to a maximum of 98 cents. Anyone can upload songs to the service, and unlike iTunes, all downloads are DRM-free.

With music labels being openly critical of Apple’s flat pricing policy, it is possible that the startup’s variable model could win wider industry support. Though the 98 cents cap is likely to put off labels looking to charge more for newer releases or bundle music with other products, such as music videos.

AmieStreet.com has yet to sign any of the major record labels, however, but the company claims such deals are on the way. Meanwhile, Amazon has also announced plans to open its own online music store by the end of the year featuring DRM-free songs from EMI’s catalog.