Peter Kafka

Recent Posts by Peter Kafka

Amazon Buys Amie Street's Digital Music Store, Shuts It Down

Add another digital music start-up to the bonfire: Amazon is buying up the retail operations of Amie Street, the online music store it helped fund four years ago, and will then shut it down. Meanwhile, the Amie Street guys will stay in New York and continue to run their company independently, focusing exclusively on Songza, a music streaming service the company acquired last year.

Terms weren’t disclosed, but it’s unlikely Amazon paid much for Amie Street’s store, which tried an innovative variable pricing model that never really broke through.

The company took a long time to get the big music labels onboard, and when it did it was in a limited way. So the store was primarily a place for unknown musicians to try promoting their stuff. It is perhaps most famous as the place you could go to hear the stylings of Ashley Alexandra Dupré, who is best known for work other than music. (Ask Eliot Spitzer.)

So Amie Street has been shifting toward Songza and a Pandora-like radio model for a while, but making that really work requires significant resources for marketing and licensing fees.

So the Amazon (AMZN) deal makes sense for both sides: The start-up team gets to keep working on its own thing, and Amazon gets a relatively cheap customer base to add to its digital-music portfolio, as it tries to figure out how to cut into Apple’s (AAPL) dominance.

Here’s the letter Amie Street sent out to its users this morning:

Amie Street is Moving to Amazon

Dear Amie Street Community,

As of September 22, 2010, all AmieStreet.com pages will be forwarded to Amazon.com and you will no longer be able to use AmieStreet.com or any of its services.

The folks at Amazon have been our advisers since they invested in Amie Street almost four years ago, and as a small thank you for your loyalty and support we’re giving you a $5 promotional code* to spend at the Amazon MP3 store. Simply click here (http://www.amazon.com/mp3credit) and enter this %%code%%. The promotional code must be redeemed by December 1, 2010.

Regarding your Amie Street account, please make sure you download all of your purchased music by September 22, 2010 (the music you have previously downloaded will continue to play normally). If you have credit in your AmieStreet.com account, please make sure you spend your remaining balance before September 22, 2010 as it will not transfer over to Amazon.com.

If you have any questions, concerns or thoughts you’d like to share with us, please don’t hesitate to contact us at feedback@amiestreet.com and one of us will answer you personally.

We believe we’ve found a great home for AmieStreet.com and are committed to making this transition as smooth as possible for you, our fantastic customers.

We want to thank you from the bottom of our hearts for all of your support, help, patience and enthusiasm, and we sincerely hope you’ll continue with us on our journey with the new Songza.com.

Thanks for an incredible four years!

-Elias, Elliott, Eric, Josh and Peter

AmieStreet.com

*Restrictions apply. See www.amazon.com/mp3credit for terms & conditions. Service available only to customers in the United States and is subject to the Amazon MP3 Music Service Terms of Use.


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