Amazon Thinks About Dynamic Pricing?

August 7, 2007

Wrote a few weeks ago about the new Amazon music downloadstore that should come end of the year.
Now Register reports that Amazon is in serious talks with the start up AmieStreet.

AmieStreet is known as a music downloadstore with a dynamic pricing system:
When a song is first posted to the site, it’s completely free. But as more and more people download it, the price steadily rises, eventually capping off at 98 cents.
This pricing system should allow the users to discover new great music without breaking the bank. On top of that AmieStreet understand itself as a social network that facilitates music discovery. They reward fans when they recommend songs to their friends by giving them credit to buy more music.
This a that Music discovery is best served by communication between people, is quite right and is since the success of myspace no secret anymore.
Amazon has a kind of community on there website. Perhaps not as enthusiastic and active than on myspace, but there are a lot of users there. And Amazon is “the king” of the recommendation system. To add something like this “reward system” makes perfect sense.
The cooperation can get very interesting.

I’m not sure about the pricing system. Don´t know if it makes for the consumer who wants to pay for music the big difference, if he pays 60 cent or 75 cent? Obvious, it does in the long term, but does a 15 cent “discount” give him the buying impulse?
And at what point are the majors for important (newcomer) releases ready to give a relevant amount of songs out for free?
Well anyway, can be a very interesting new system.

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