Amazon backs demand-based music pricing system

Amazon has invested in Amie Street, an online music shop which uses the popularity of a song to determine the pricing.

All songs at Amie Street start at a price of 0 cents, as more and more people download the song the price increased, capping at $0.98.

When members recommend their favorite songs to their friends, they get rewarded with credits toward the purchase of more music. The more popular a song becomes after a member has recommended it, the more credit he or she receives to spend on music. The recommendation system, then, gives members the incentive and the means to keep discovering and sharing new music.

"AmieStreet.com grew from the idea that we needed to make buying music social and fun," AmieStreet.com's cofounder and CEO Elliott Breece said in a statement. "The Amie Street community took over from there, driving a shift toward a music marketplace where consumers decide what is popular and what music is worth."

Everyone can upload songs to AmieStreet.com and all songs are downloadable in the MP3 format, without any DRM.

Source: Yahoo News