Amazon (Nasdaq: AMZN) has led a first-round investment in Amie Street, an unusual digital music retailer for independent artists. Prices for tracks at Amie Street start free and rise in price the more they are downloaded, capped at $0.98; users earn credits for recommending songs to each other and downloads come as DRM-free MP3s. The size of Amazon’s investment was not disclosed, but the e-tailer is a fan of the startup, which was founded in 2006 by three Brown University students. Jeff Blackburn, SVP-business development, said allowing customers to directly influence song pricing “is an interesting and novel approach to selling digital music.” Amazon is due to launch its own music store this year. Could we, then, see the e-commerce giant take on this pricing policy in future? It is a model inverse to that of many in the marketplace, who mark down the most popular chart hits in order to drum up trade. Release.

Update: Reuters:  The round included some private investors. The funding will help the site expand its social networking and add staff. 

• Amazon To Launch DRM-Less Digital Music Store; EMI First Major Tenant