Why did Amie Street Keep Acquisition of Songza?

Jan 25, 2008 · 3 mins read
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Acquisitions are part of business, and they can be pivotal for a company looking to quickly expand on its own offerings. Sometimes businesses like to wow the world with their finished product, and don’t publicize the details of an acquisition. Perhaps this was the case with Amie Street, which acquired the online music streaming service Songza some six months ago.

After a TechCrunch article revealed the acquisition, we got in touch with the folks at Amie Street to hear the firsthand story behind the deal. Below is the brief interview I had with co-founder Joshua Boltuch of Amie Street:

Kristen Nicole: It’s been found out that Amie St acquired Songza late last year. Why keep it a secret?

There is no big secret. We acquired Song with a bigger vision for the product and we were planning on announcing the acquisition when that vision was ready for the public. From our customer’s perspective, the experience on Songza has not significantly changed since we acquired it so there was no urgency to announce it.

Kristen Nicole: Can you reveal any of the financial details about the deal?

No, although I can say that the unattributed report coming from TechCrunch that the price of the acquisition was for the high six figures or low seven figures is not true.

Kristen Nicole: Songza started out with a different model for streaming music. How are you looking to integrate Songza into your long term plans?

Songza adds another dimension to our company and gives us a great product to build upon in an area that is extremely popular with music fans. Our focus is on providing the most enjoyable music experience possible and compensating artists and labels for their hard work, and we’ll listen to our customer’s (both artists and labels) to tell us what they want and how they want it.

Kristen Nicole: What did your previous partnership with Songza consist of?

It was an affiliate partnership.

Kristen Nicole: Amie St’s model has always been based on supply and demand determining the actual price of a song, which is a model that larger services such as Apple and Amazon are now adopting. How does this furthered trend affect you?

I think it’s good validation of our model and that pricing all songs at $.99 is not the best way to sell digital music. But I wouldn’t say Apple is adopting our model. Pricing songs at $.69, $.99, and $1.29 is not demand based pricing–just three different price points. We are the only store where fans drive the price because we continue to see that empowering fans and including them in the process is the best way to maximize sales.

Kristen Nicole: Your model is also very socially driven. Any plans to incorporate this into aspects of Songza as well?

If you’re talking about incorporating something like the REC system on Amie Street—where you’re rewarded for recommending music with site credit for more downloads—that’s not something that can just be plugged into Songza. But if you mean making Songza more social in general, absolutely.

You’ve already seen some small but important improvements on Songza around sharing and connecting members, for example sharing your favorite music via Facebook and Twitter, and there’s certainly bigger improvements on the way.