Oct 3, 2007

Amie St is the future

I've been aware of Amie St for a while now -- heard the buzz, checked out the service a few times. Looked interesting, but I never spent too much time really thinking hard about what they were creating.

The way it works is that all songs start out as free downloads and rise in price the more they are purchased (with a max of $0.98). Variable pricing, with tons of social and community elements worked in.

Yesterday, Thaddeus Clark twittered that the new Sharon Jones & the Dap-Kings album, 100 Days, 100 Nights, was available on Amie St for download for $1.80. I read Thaddeus' tweet a few hours after he posted it, and being a big fan of the first two Jones/Dap-Kings albums, I popped over to Amie to buy it. When I got there, the album was listed at $6.22. Demand had been increasing for this great record, and prices started rising. So I bought it -- still a great deal at that price.

As of now (Wednesday 4 pm EST), the album is listed at $7.22. Still rising.

Thaddeus then wrote that Amie St. "appeals to the trend setters, early adopters, and majority all in one model." I read that at least twice.

Then it hit me. Hard. Media consumption with variable pricing based on the profile (and time of that profile) of the buyer. Simple model but one that covers the whole spectrum of possible listeners in an effective, and efficient, and social, and fun, way. Brilliant. Utterly.

For the past year I've been constructing an investment thesis (and trying to put together a portfolio of investments) that suggests that enormous value could be created by services that look at models of distribution, production and consumption from a different way. That look at them almost from the opposite, or outside-in, direction, viewing the consumer as the most important player, and not the distributor or manufacturer or producer. Outside-in services. Starting from the consumer, these services can then build value in much different, more efficient, better ways.

Amie St. hits this squarely on the head. It is the future of music distribution.


Dan Reich said...

Brilliant observation...could not agree more..

The next question is, how will the movie and television industries adapt to the same problems that the music industry is just beginning to sort out?

Anonymous said...

What happens when iTunes, Amazon, Walmart, or whoever else implements demand based pricing? Amie doesn't look so sexy then :)

Dan Reich said...

How long would it take for these larger corporations to actually implement this new standard of demand based pricing? Why would they change their business model when it currently proves to be working? More importantly, is their business model working because they are, in essence, the industries leaders? Nevertheless, these companies have proven to use current and best practices, so I would also agree that Amie street could and may not "look so sexy then".