08/14/2008 01:25 pm ET Updated May 25, 2011

The Spitzer Bump: How The Former Governor's Socks-On Predilections Gave New Music Media A Pushs

Do you remember Amie Street Music? If it sounds vaguely familiar to you, that may be because it was a small but significant part of one of the biggest stories of the year.

If "Amie Street" doesn't quite ring a bell, then try Ashley Alexandra Dupre — aka "Kristen," the 22-year-old call girl who entertained client Eliot Spitzer in room 871 of the Washington Mayflower. She happened to have been a struggling recording artist with two songs on Amie Street Music, an online music site where price and popularity go hand in hand — literally. Every single starts off free, with prices only rising if warranted by user feedback and popularity — to a maximum of 98 cents. That provides a simple — and cheap — way to differentiate between artists on the basis of quality, at a price low enough to make for a low-risk listen.

That low-risk listen is what attracted thousands of people to Ashley Dupré's songs on Amie Street after the Spitzer scandal broke — resulting in at least 500,000 listens and a small fortune for Dupré. It also netted a tidy sum for AmieStreet, which gets a 30% cut.

More than that, it showed that the interactive, user-generated pricing model works in the music market — a market that has seen much upheaval in recent years as artists have taken to the internet in efforts to promote their work (and subvert the power of record companies). MySpace pages have become genuine conduits for new music, and sites like AmieStreet — just two years old — are growing.

In fact, Amie Street recently signed a major content deal with The Orchard, one of the largest digital music distributors in the world, with a catalogue of over a million songs. It's not just quantity, though, it's quality — here's a random sampling:

50 Cent, Bloc Party, The Hold Steady, Coldplay, Black Flag, Frank Sinatra, Fats Domino, Bing Crosby, Yoko Ono, Johns Denver, Coltrane and Lee Hooker, Motley Crue, My Morning Jacket, Nada Surf, The Donnas, Donna Summer, The Pet Shop Boys, Ween, Wayne Newton, Elton John, Ella Fitzgerald, Billie Holliday, Nina Simone, The Decembrists, The New York Dolls, The Oak Ridge Boys, Sufjan Stevens, Santana, Public Enemy, and Quiet Riot, for when you wanna get wild, wild, wild (plus the Bay City Rollers, which is good for any S-A-T-U-R-D-A-Y Night).

Yes I know that this list reads like I scrolled up and down alphabetically, but so what. The point is, the music is diverse and there's a lot of it — and now, all of it will be subject to the Amie Street model. From Coldplay to Coltrane, users will be able to determine the 'worth' of a song, and pay accordingly.

What that means: The number of well-established labels and artists signing on to new methods represent an important tipping point in evolving online music models, and specifically with respect to demand-based pricing. It also represents a transfer of power to the consumer in the valuation of music — which is definitely a shift away from the prior record-company stranglehold on the market.

Or should I say, yet another shift, one more definitive rejection of the former days of record-company dominance (these days, Prince wouldn't even have to change his name, he'd just get a blog). While the record industry is melting down and struggling to adapt, innovative models at companies like Amie Street are growing.

The big step will be when (or if) the major labels adopt this approach, or if they're gobbled up by a major distribution company — like, say, Amazon, which made an "undisclosed investment" in Amie Street last year, exploring alternatives to the $0.99 per-track flat rate. It may be inevitable - with the notion of "records" with bundled songs fast becoming obsolete, it makes no sense to charge $0.99 for Prince's most popular song ("Kiss," according to iTunes) as it does for his least popular (ironically titled "It's Gonna Be Lonely"). But, maybe that song would be less lonely if it only cost a penny to buy it.

(And yes, I understand that these songs are amortized across the whole, which is why I have no problem paying good money for Prince when I'm getting such a steal on the Killer Barbies. But the point is, this is a model that provides an alternative to iTunes. In the digital music market, that's sort of a big deal. See above re: Amazon.)

So - to paraphrase a certain many-monikered artist, you don't have to be rich to rule that world — all you need is some extra time for your users to decide what the price should be, and how it should evolve. That's a big step forward. Would it have happened without Eliot Spitzer's unfortunate side habit? Probably — even if the record labels don't want to admit it. Perhaps they ought to hearken some more advice from our sage: "Act your age, mama, not your shoe size, maybe we could do the twirl." There's a metaphor in there somewhere.

: Peter Kafka at Silicon Valley Insider rightly pointed out that Dupre only got paid for the songs that were actually purchased, not merely sampled. By his calculations that was a far more paltry payday; alas, Amie Street is firm on not releasing individual artist figures. Even so, whatever she made, that doesn't obviate the point of this post: That the model is changing, and sites like Amie Street are part of that.

Update II: A clarification from The Orchard - not all artists will necessarily be opting in to Amie Street (it's the artist's call); also, while those who do will be subject to variable pricing as per the Amie Street model, the Orchard tracks won't necessarily start at free.

Millionaire Call Girl? Spitzer's Hooker Rakes In A Fortune Online From Her Music [ETP]
Spitzer Scandal Boosts Music Startup [DealBook]
What The Hell Is Amie Street Music? [HuffPo]
Music's New Supply/Demand Model: Amie Street Site Prices Song Downloads Based on Popularity, Starting at Zero [ABC News]
Digital Music and the Free Market [HuffPo]

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