Amie Street Lets Music Lovers Conduct the Show

AmieStreet.com is using a unique pricing model to capitalize on the social aspects of buying music online.

The site—founded in 2006 by three friends just out of college, Elliott Breece, Josh Boltuch and Elias Roman—allows users to essentially set the cost of a song, based on the tune’s popularity in the user community.

“Many sites look at music as a transactional, acquisition-based experience, “says Ernan Roman, principal of Ernan Roman Direct Marketing (and father of Elias Roman). “The emotional investment in music for many people is huge and not well understood.”

The pricing model is community driven; all songs start at 0 cents and can go to as high as 98 cents, based their number of purchases on Amie Street. Members are awarded with credits for more music when they recommend tracks that go up in price.

The typical user isn’t who the young founders expected. They thought their target demographic looked much like them. Instead, the bulk of revenue and page views are generated by 35 to 55 year olds, who want to keep current on music and perhaps share it with their children.

As the site developed, they realized they needed to get a better handle on their target audience and how to best reach them. Dad Ernan helped Amie Street conduct research, to determine what users wanted from the site and how the site could capitalize on social media.

Amie Street wasn’t initially sure how personalized to go with its communications. “We were worried that people would be sketched out if the contacts were overly personalized,” says Elias. “We found the opposite. People wanted relevant content—and they wanted it more often, which totally shocked us. We’ve been able to position our e-mails as a cooperative effort to send them what they want.”

A general e-newsletter goes out once a week; users receive more customized newsletters only when there is enough good new material to make it useful. Because of the site’s content, indie rock fans get newsletters more frequently than country listeners, for example. The increased personalization has increased newsletter-driven sales 75%.

After the research, the site went through a complete redesign. Interestingly, the response from users was that the initial design was too safe. “They didn’t want to go too far out, and it ended up being perceived as too conservative,” says Ernan. “They played it too straight—the element of fun and excitement didn’t exist there yet.”

For Amie Street, which received financing from Amazon.com last year, the best promotion has been word-of-mouth plugs on blogs and online sponsorships. An unexpected boost came in the spring, when blogs like The Huffington Post wrote that Ashley Alexander Dupré—the call girl in the Eliot Spitzer scandal—had songs on Amie.

On a more “reputable” note, the site sponsored the online premiere of the movie “The Cult of Sincerity” on YouTube, creating a one and half minute pre-roll that ran before the movie, explaining the partnership between the site and the filmmaker.

“On a conversion basis, it is one of our most exciting campaigns,” said Elias. ” We’re seeing member-to-paying customer conversion rates of 40% and the ‘Cult of Sincerity’ team is getting effective CPMs in the three-digits from the campaign.”

The site is also working on a co-promotion for a new album from Tay Zonday, whose “Chocolate Rain” video became a sensation on YouTube, with over 21 million views.

For more on Amie Street, see the June issue of Direct magazine.