Amazon.com has made an investment in a new start-up digital music download service and social networking site AmieStreet.com, a site which allows musicians to publish DRM-free music for download and purchase.  However, unlike flat-price music services, the track price will be based on how popular the track is, ranging from free for a newly submitted track to a maximum of $0.98 per track for the most popular and recommended.

Artists also get a far better share out of each purchase, earning 70% of the song sales.  For example, if a song becomes popular enough to sell for $0.98, the artist would be making almost 69¢ per sale, unlike iTunes, Napster, etc. where a bulk of each sale ends up in the pockets of the music industry, leaving just a few pennies per sale for the musician.  With how well social networking sites already help musicians, this service promises to promote smaller, independent artists.  The artists also retain ownership of the tracks they upload.

It will be interesting to see how well this pricing model turns out.  For a start, as the price depends on how popular a song is, consumers would not need to fork out heavily when purchasing older less popular tracks.  It also helps promote new music, since consumers are more likely to pay a few cent for a song they are unsure of than fork out 99c.  Finally, it can potentially encourage artists to make better tracks and rethink about writing music similar to poor selling tracks, since the more popular a track is, the more the artist gets from each sale also.  Finally, another advantage for the consumer is that the tracks are free of DRM and will play on any MP3 player.