Amie Street gets funding from Amazon

It's been announced today that music-store-slash-social-network Amie Street has closed its Series A funding with Amazon leading the investing.

As it's been explained to me, this has nothing to do with Amazon's own eventual entry into the digital music retail space. The belief is that there will be more than one winner in the digital music future, Amie Street and Amazon hit different demographics, and Amie Street's unique model positions them well for success.

There are some social networking aspects to the service (befriend other users, etc.) but at its heart Amie Street really hinges on two concepts:

1. The users of the site determine the price of a song by purchasing it. Each song begins at $.00 and inches up towards $.98 as more people purchase and "REC" it. Artists get 70% of the revenue after Amie Street recoups $5/song.
2. After a user has RECed a song, they can cash out their REC at any time for a credit equal to the difference between the current price and the price they RECed it at. So if I like a song and REC it at $.08 and it goes up to $.50, I can earn myself $.42 of credit to buy more music. Users get a limited number of RECs when they purchase credit.

As far as what's on there, a lot of it is music uploaded by artists themselves, so some of it's great (The Seedy Seeds) and some of it isn't. Some forward-thinking labels (Nettwerk, notably) have been playing ball as well, so marquis names like The Format are starting to pop up.

AND THERE IS NO DRM.

I've thought it's a cool idea since I started using the site last year, but nobody really cares what I think. Amazon's endorsement, however, that's a pretty big deal. Things are looking up for the fledgling service.

[amiestreet.com]

Disclosure: I've recently been doing a bit of work for Amie Street...mostly writing reviews.