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Your Song, Your Price

by Beth Negus Viveiros

Think downloading music is nothing more than paying for a tune? Not so fast.

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

One marketer looking to make that connection is AmieStreet.com, a music site with a unique pricing model: Customers essentially set the cost of a song based on its popularity in the user community.

Most brands aren't sure what consumers expect, Roman says. A firm that views its site merely as an “electronic cash register” is missing a chance to create an experience for visitors, he adds.

Amie Street was founded in 2006 by three college friends: Elliott Breece, Josh Boltuch and Elias Roman, Ernan's son.

“Part of the motivation was to not have a real job after college,” laughs Elias, who first appeared in Direct magazine in 1987 at age 4 in a photograph with his dad. Elias is actually a third-generation direct marketer — his grandfather Murray Roman is in the DMA Hall of Fame and is considered the founder of professional telemarketing.

The friends decided to start a company based on something many young people had become very good at: stealing music.

“We grew up in a community of really passionate music fans and we were acquiring music left, right and center,” Elias says.

However, music sites often gave fans only one option: paying more than what a song was worth to get a restricted file they couldn't do much with.

“It wasn't really ever a question of whether we should buy or acquire — it was always acquire,” Elias says. “We thought, ‘What if we brought discovery and acquisition under one roof and allowed people to own the content instead of renting?’ We were in the perfect environment to try out a new concept and allow people to give feedback and have input into pricing.”

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

But the typical user was different from what 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, the partners realized they needed to get a handle on their target audience and how to reach it. Dad Ernan helped Amie Street conduct research to determine what users wanted from the site and how it could capitalize on social media.

Before doing the research, Amie Street wasn't sure how personal to get with communications. “We were worried that people would be sketched out if the contacts were overly personalized,” Elias says. “We found the opposite. People wanted relevant content — and they wanted it more often, which totally shocked us.”

A site overhaul followed. Users felt the initial design was too safe. “They played it too straight,” Ernan says. “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 the site.

On a more “reputable” note, Amie Street sponsored the online premiere of “The Cult of Sincerity” on YouTube. Its 90-second spot ran before the movie and explained the partnership between the site and the filmmaker.

“On a conversion basis, it's one of our most exciting campaigns,” Elias says. “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.”

Concert promotions help boost the profiles of both Amie Street and the artists. Users can vote for the up-and-coming bands they'd like to see open for more well-known acts. The winning bands get opening slots at pending concerts.

New Book Release: Voice Of The Customer Marketing
"This is the definitive playbook for this new customer-driven era."
—Frank Eliason
Senior Director, National Customer Operations, Comcast
"Thank you, Ernan, for tuning us in to the inner voice of our customers! A deep understanding of our customers' needs and preferences is essential for our future growth."
—Karen Galley
President, Patient News Publishing