Amazon (AMZN) invests in Apple (AAPL)-fighting start-up

Posted Aug 6th 2007 8:15AM by Douglas McIntyre
Filed under: Deals, Industry, Competitive Strategy, Apple Inc (AAPL), Amazon.com (AMZN)

Amazon (NASDAQ: AMZN) is investing in a new company called AmieStreet which prices music downloads based on their popularity on the service. According to Reuters "executives at Warner Music Group and other music labels have complained that songs should not all be sold at one price" Apple (NASDAQ: AAPL) offers flat pricing on iTunes at 99 cents.

On AmieStreet.com, all songs start with an initial price of zero and their prices move up based on the popularity of the download. The maximum price is 98 cents.

It remains to be seen whether Amazon's own digital music download store, which will open this year, will be much of challenge to Apple. The Amazon advantage is that it already is one of the largest seller of CDs so it has a huge music customer base.

The large music publishers now have a chance to put their money where their mouths are. If they want a better pricing model, the can all become involved with Amazon and its new venture.

If not, they remain under Apple's thumb.

Douglas A. McIntyre is a partner at 247wallst.com.

Tags: AAPL, AMAZON, AMZN, APPLE

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Reader Comments (Page 1 of 1)

8-06-2007 @ 10:40AM

gslv said...

They're talking at cross-purposes there about variable pricing. Labels only want the variation to be higher. Two different ideas.

8-06-2007 @ 11:38AM

d0b3r said...

It's obvious the labels want popular songs to be worth more than 99 cents, they don't want to reduce their profits!! If this new service maxes out at 98 cents, I don't see why labels would prefer making less money with them