Amazon invests in Apple-fighting start-up

Published: August 6, 2007, 4:15 am

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

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