Amazon.com has acquired the AmieStreet.com digital music service, for an undisclosed sum. The most immediate result of the acquisition is that the AmieStreet.com service will cease to exist as of Sept. 22. All AmieStreet.com links will forward to Amazon’s MP3 store instead, and all AimeStreet account holders will be given $5 credit to the Amazon store.

Amazon originally invested in AmieStreet in 2007 as the lead investor in the company’s Series A funding round, and remained an advisor to the firm since.

The founders of AimeStreet, meanwhile, are launching a new social music streaming service called Songza. They will not be transferring to Amazon along with the company. According to AimeStreet co-founder Josh Boltuch, Songza.com will let users build their own radio stations and collaborate on building radio stations around similar tastes.

“We saw the trend of music streaming starting to explode and wanted to get in on that,” Boltuch says of the decision to sell AimeStreet. “The move allows us to focus on Songza and solely on Songza.”

The new service will contain various features typically found in the videogame space, such as leveling, badges, check-ins based on songs (rather than location) and other elements not yet revealed. The service, still in beta, will be accessible online, via set-top boxes, and mobile devices.

The longer term implications of the acquisition for Amazon are not yet clear. Boltuch says Amazon will build a co-branded AmieStreet/Amazon MP3 page online to keep AmieStreet customers, but that Amazon at least initially will not be incorporating AmieStreet’s dynamic pricing feature.

Tracks listed on AmieStreet initially are free and slowly ramp up in price as more users download them, capped at 98 cents. The service encourages user recommendations to drive sales and change prices. All users have a bank of credits which they use to buy tracks. In addition to purchasing new credits, members also receive credits each time a song they recommend to friends is purchased.

The amount of credit received depends on how much the member recommending the track paid for it, versus the price paid by others. So if a member paid 2 cents for a song when it was new and as a result of recommending it to others the price gradually increased to 46 cents, that member would receive 44 cents of credit into his account each time a friend buys that same track.

Amazon historically has had no problem playing around with digital music pricing, often offering deep discounts on digital albums for both new releases and catalog. Representatives at Amazon have not yet responded to requests for comment, and Billboard will update this story as we learn more.


(NOTE: Songza founder and CEO Elias Roman will be presenting the details of the new service at Billboard’s Mobile Entertainment Live: The Music App Summit, taking place Oct. 5 in San Francisco as part of the Innovators Showcase panel, which also features other startups displaying their new products, services and technologies).