Downloadable music online web store, Amie Street has recently launched a new pricing scheme for music.  The price is determined by the frequency of how many times a song is downloaded.  For example, R&B singer, Choklate’s song, “Waitin’” is available for 23 cents on Amie Street in comparison to 99 cents on iTunes and Napster.

The tracks that are submitted newly are free, but then begin increasing as more people download the song.  After about 130 downloads, songs are capped at a price of 98 cents to compete against the standard 99 cent price. 

The Wall Street Journal has reported a couple of risks with Amie Street.  The first risk is that many of the songs that are on Amie Street are recorded by less mainstream, independent artists that many people may not have heard of or may not be interested in paying for.  However, the Amie Street founders stated that they are countering this risk by showing that this is the point of the website, exposing users to unfamiliar music.  New York based, marketing research company, Jupiter Networks states that the problem with Amie Street is that the low-cost may tend to be associated with low-quality music. 

Another risk pointed out by The WSJ is that MySpace will soon allow the bands that have an account on the #1 social network to allow users to pay for their music.  Not only that, but the musicians can set their own price as their music is their own property.  At that point, Amie Street needs to figure out a business model that gives the bands on their website an incentive and possibly take away from the market-share that MySpace has which is over 3 million bands and musicians.  Currently, Amie Street gives their musicians a 70% cut of all songs sold.  The MySpace revenue-sharing percentage is not currently known.

Amie Street was founded by 3 Brown University alumni students.  The profiles of the three founders and three-person development team can be found [here].