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Sony Music Entertainment's catalog is coming to indie music retail site Amie Street, in the New York-based start-up's first major label deal.

But here's the catch: Sony's catalog will not be participating in the "dynamic pricing" model that's been Amie Street's trademark--unpopular songs are the cheapest, and the price rises as a song is downloaded more. Instead, Sony songs will be available for a flat 69 cents, 99 cents, or $1.29 based on popularity.

"It wasn't a hard decision for us," Amie Street co-founder Josh Boltuch told CNET News. "This isn't affecting all the other dynamically priced music on the site." He noted that RED, the indie music distribution company owned by Sony, already offers its songs on Amie Street through the dynamic-pricing model. "Sony Music obviously has the option to experiment with dynamic pricing at their discretion," Boltuch added. "Clearly we would love to do that with them."

This isn't the first time that an indie music retailer has had to compromise to ink a major-label deal. Sony was also the first major label to bring its catalog--well, its "classic" back catalog--to subscription site eMusic. But the deal resulted in eMusic raising some of its prices in tandem.

Amie Street, which pitches itself as a way to discover as well as purchase new music, made major headlines last year when it was the only place on the Web to buy songs recorded by Ashley Alexandra Dupre, the call-girl-slash-aspiring-pop-star at the center of the Eliot Spitzer scandal.

Comedian Penn Jillette demos his new iPhone app.

(Credit: CNET / Josh Lowensohn)

SAN FRANCISCO--The fall season has officially begun. Starting Monday morning, the annual TechCrunch50 conference took over the San Francisco Design Center for two days of start-up pitches and presentations; the conference's angle, as co-hosts Michael Arrington and Jason Calacanis reiterated, is that all 50 companies on the roster are completely new and launching for the first time.

Start-ups presenting at the conference, which were chosen through a behind-the-scenes elimination process, were grouped into categories. The first of the day was "Youth & Games," with an array of kid-focused and entertainment start-ups.

The day had already begun with some theatrics: the news was broken (unsurprisingly, by TechCrunch) that a previous TechCrunch50 winner, personal finance start-up Mint, had just sold to Intuit for $170 million in cash. Mint CEO Aaron Patzer took the stage on Monday to formally confirm the announcement.

So it was appropriate that the first pitch of the session, kicking off the TechCrunch50 conference as a whole, was pretty far out in left field: an iPhone app created by comedy-magic duo Penn & Teller. At first, their developers came onstage and apologized that the entertainers couldn't actually make it to the conference, and proceeded to demonstrate a text-messaging magic trick app. But then Penn Jillette stepped out to formally demonstrate the app, which has the aim of (ideally) fooling the iPhone user's friends into thinking that they're actually playing a guess-the-card trick with Penn and Teller via text messaging.

"It's not so much a moneymaker for us as a public service to get guys laid," Jillette said when asked if there was a revenue model to the app, which sells for $1.99 and is now in the iTunes Store. "If there's a Nobel prize for getting guys laid we'd definitely be in the running for it."

Jillette also announced that the app's alpha tester is a stripper from Philadelphia who has raked in extra tips by demonstrating the app alongside lap dances. Unfortunately, the array of judges didn't seem terribly impressed at its long-term business prospects.

Child's play for start-ups
The next presentation couldn't have been more different: Story Something, "which makes the personalization of children's stories simple and easy," founder Jim Rose said. The Web company uses Mad Libs-like text fields for a parent to personalize a story with their children's names and other attributes, and new stories can be sent on a schedule--for example, every evening before bedtime--as part of a paid-subscription model. There's also an iPhone app for easy reading to kids.

Most of the questions from the judges pertained to business model and the intellectual-property rights associated with the stories published through StorySomething. Judge Don Dodge called it "a lottery-ticket investment" for an angel investor, given the relatively low overhead costs and likelihood that such a company could scale without much additional investment.

Other judges' questions were a bit sillier.

"How profound is the assumption that parents will continue to make kids?" judge Yossi Vardi asked facetiously.

ClaseMovil lets you wander around a virtual world and spend microcurrency. It's also got an education tools, but is currently for Spanish-speaking users only.

(Credit: CNET / Josh Lowensohn)

The third start-up in the round was the Mexico-based Clasemovil, a start-up that offers game- and video-based online educational exercises for kids in areas like math, science, and history. Clasemovil uses a format much like trendy kid-focused virtual-world services--its virtual currency, for example, is used to teach personal-finance lessons. The executives were accompanied by an on-staff teacher who vouched for the company's platform as a classroom tool, demonstrating progress-report tracking features.

It's launching first in Latin America (in the U.S. next year, apparently) but its founders hope that it ultimately will allow elementary-school students from around the world to learn by interacting with one another. ClaseMovil, which hopes to make money from subscription fees from both individual users and educational-institution subscriptions, has already raised seed funding and is looking not just to investors but also grant money from governments and organizations.

When asked by conference host Jason Calacanis whether they'd invest in it, judges said they'd consider it. Veteran investor Ron Conway said that it could benefit from some partnerships with other companies. "I would consider, but I wouldn't write a check until it's in English," Don Dodge said of the currently Spanish-only site. "English is where the money is."

Two judges, investor George Zachary and MySpace exec Jason Hirschhorn, said that they'd turn the investment opportunity down outright, with Zachary citing "so much competition" and "huge brand and marketing challenges" when it comes to making a splash in the education market.

The fourth start-up was another kid-focused one, ToonsTunes, a virtual world focused on teaching kids about making music. Players can record music through a mixer interface, network with other users, and sign up for "concert" spots at virtual "clubs." They can share their creations on social networks like Twitter and MySpace, or download them as ringtones. There is, of course, also a virtual currency involved for micropayments like purchasing samples of pop songs.

Obviously, virtual worlds for kids are hot in the wake of the success of companies like Club Penguin, which sold to Disney for $350 million two years ago. And the graphics-heavy ToonsTunes received a pretty warm reception.

"I like it very much," George Zachary said, calling it "GarageBand meets Club Penguin." Don Dodge said that "the quality is absolutely amazing." Hirschhorn questioned the company's ability to compete with the likes of "Guitar Hero." Vardi called it "very, very impressive," considering especially the fact that the company was privately funded and employs only five people.

Ron Conway said that the makers of Guitar Hero would love a product like this, but Hirschhorn remained the skeptic and said that it would be easy for the likes of a huge player like Electronic Arts to create a similar product with far better resources and connections.

Sealtale lets you claim products or services you use, then stick a logo of them on your blog.

(Credit: CNET / Josh Lowensohn)

The Sealtale of approval
The last company of the "Youth & Games" round was a little different: Sealtale, a Korean company that lets users create personalized badges (or "seals") to embed on their blogs to identify themselves and express their affinities--as an iPhone user, a supporter of a certain cause, a fan of a band, for example. Clicking on a "seal" can bring up related blog posts from other bloggers with the same seal. It's one part self-branding service, one part blogroll, and one part Google Friend Connect-like networking service.

Calacanis asked the judges what they thought of Sealtale, which he called "Webring 2.0" in an allusion to the '90s-era blog network start-up. "We'd have to see how the product took off and how the acceptance was in other countries (besides Korea)," Conway said. Hirschhorn said he liked the user interface but wasn't totally sold how it was needed in a world of MySpace pages and Facebook fan pages.

So what did the judges think overall of the "Youth & Games" category at TechCrunch50? Calacanis asked them which of the five companies they'd take an investor meeting with, and it looks like there was a clear winner: Dodge and Vardi both preferred ToonsTunes, and Conway said he'd take a meeting with either ToonsTunes or Story Something but ranked them about even. Zachary, meanwhile, said "I'd put ToonsTunes at the top, Story Something a distant second, and the others are off the map."

Hirschhorn--the lone entertainment-industry member on the panel, it should be noted-- was the dissenter, ranking Story Something at the top and ToonsTunes behind it, sticking to his instinct that it'd be tough to get a music games start-up off the ground when there are already so many big players in the industry.

Ashton Kutcher at the Brainstorm conference earlier this year

(Credit: Ina Fried/CNET News)

Everybody panic!

Seemingly unable to let any hot social media start-up escape his hunky clutches, it appears that actor and prolific Twitter oversharer Ashton Kutcher is now using where-you-at, ping-your-friends city guide app Foursquare. A tipster pointed me to a Foursquare account for user "aplusk," the same handle that Kutcher uses on Twitter for his 3 million-plus followers.

Is it real? Well, his friends include Digg founder (and occasional bromancer) Kevin Rose, videoblogging personality Justine Ezarik, and "mrskutcher," which is the Twitter username for his wife, actress Demi Moore. Since Foursquare requires mutual approval of friend connections, this would indicate that the likes of Rose and Moore believe the account to be legit. And since Kutcher's Twitter account is linked to the Foursquare profile, which requires using the Twitter log-in credentials, it's either legit or Kutcher's Twitter account has been hacked. (And there have been no indications as to the latter.)

So why is this important? Well, it could be pretty momentous for Foursquare if Ashton Kutcher sticks around.

All joking aside, the 31-year-old Kutcher has been a prominent, and admittedly important figure when it comes to bringing social-media tools into the mainstream. His race to beat CNN to 1 million Twitter followers (he won) was one of the publicity blitzes that put the name of the microblogging service on the pop-culture map. Foursquare, a tiny New York-based start-up that launched only six months ago out of the ashes of the ill-fated Dodgeball and still hasn't wrapped up a round of venture funding (though I hear they're working on it) could really get a boost from this--assuming their servers are ready for it.

But it also raises an important security question. Unless they're using Foursquare to broadcast their locations for promotional purposes (as some party photographers and DJs in NYC are already doing, and it'd be certainly interesting if Kutcher did something like this), celebrities using any kind of GPS-based or geolocation app could be making themselves vulnerable to varying degrees of annoyance ranging from pesky fans with cameras to full-on stalking. It could also make Foursquare an appealing target for hackers.

But I assume Kutcher, who seems like a pretty smart guy, will be careful with who he lets onto his friends list. Now for the real question: how long before he unlocks a "Crunked" badge?

UPDATE (1:06 p.m. PT): Just to clarify, a few people were under the impression Kutcher had already deleted his Foursquare account. That was actually due to a broken link in this blog post; Kutcher is, for the time being, still on Foursquare. (My bad.)

On a completely different note, I recommend reading this follow-up post on branding consultant Matt Spangler's blog about what Ashton Kutcher means for Foursquare.

On Tuesday Vimeo rolled out a new way to discover content on its service. Dubbed categories, the new system lets users explore content that's automatically been sorted by an algorithm that scans across Vimeo's groups and channels and picks some of the best and most interesting clips.

The system works by having group and channel owners pick just two genres that their videos best fit in. After which, the algorithm goes through and automatically picks a few clips that are sent to the parent category page. The goal is to have this system constantly watching for content across the entire site, and highlighting some of the best or most noteworthy stuff with very little need for human editors.

Categories come to Vimeo

(Credit: CNET)

That's not to say the system can work well without humans, or is being designed to replace user input. A big part of the algorithm is based on videos users are favoring on the service. In a call with CNET News last week, Vimeo's community director Blake Whitman told me that the algorithm does not even count views, something he says can easily be gamed. Whitman and the rest of the team are also hand-picking certain videos to be featured on the new category pages as the algorithm continues to be tweaked.

Along with categories, there are also editor-created subcategories. These are based on trends and can change based on the volume of content within a certain category, and help to further hone down what users want to view outside of titles and tags.

What's interesting about this approach is that in many ways it's taking some of the responsibility off the users who cannot choose a category or add tags to their own clips. Most other video hosts make this a mandatory part of the upload process. Part of the reason for Vimeo's, as it was explained to me, is that it keeps people from adding videos to categories for which they don't belong. With this system, videos are first vetted by group and channel to make sure they're a good fit.

That's also good news for advertisers, which Vimeo can now pitch with very honed, and focused content verticals. On the other side of that, Vimeo users will be more likely to see more integrated ad campaigns, similar to the one Honda did a few months back for one of its vehicles.

Vimeo's next big project is an overhauled analytics dashboard that will give users a high-level overview of how their videos are doing compared to one another, and across the entire service.

Vimeo's categories suck up interesting content from groups and channel pages.

(Credit: CNET)

If scientists got the correlation models together, I wonder if they would find a blisteringly harmonious relationship between those who loathe reality TV and those who loathe Twitter.

Critics of the microblogging service declare that, like reality TV, tweets are just mindless ego-fodder being released on the masses by the second.

Well, now the two ego-fodder receptacles appear to be coming together for the further enlightenment of the world.

Variety reported Monday rather up-to-the-minute news of Brillstein Entertainment, a powerful artist management company, and Reveille Productions, the folks who used to be owned by NBC Entertainment's co-chairman, Ben Silverman, and have produced rather likable TV in "The Office" and "Ugly Betty."

These two significant players are about to make a reality series in cooperation with Twitter.

The creative possibilities for Twitter will surely never be over capacity.

(Credit: CC Mykl Roventine/Flickr)

Perhaps you yourself have had a gestating idea for a reality TV series featuring Twitter and will feel miffed that someone has gotten there first.

All I can tell you is that according to the plans for the as-yet unnamed opus, the concept consists of "putting ordinary people on the trail of celebrities in a revolutionary competitive format."

Will real people compete to see who's the finest twittering paparazzi? Will they have to decipher cryptic tweets sent by Shaq and Demi Moore with clues to buried treasure? Who can possibly know?

All that is clear is that Variety quoted Brillstein's Jon Liebman as saying: "We've found a compelling way to bring the immediacy of Twitter to life on TV."

Strangely, the words 'Ashton' and 'Kutcher' have not immediately been associated with this project.

But it seems that soon "Dancing with the Stars" and "American Idol" may find a rival in realitweet TV.

There are literally dozens of categories in the annual Webby Awards--too many, if you ask some--covering pretty much every niche of digital media. This year's winners, announced Tuesday, are quite a lot to scroll through.

The list of top honors, however, is short.

This year, the Webby Awards' Person of the Year is former "Saturday Night Life" cast member Jimmy Fallon, whose new "Late Night with Jimmy Fallon" has brought Twittering and gadget fandom to the network-TV crowd.

The film-specific Person of the Year award goes to "Family Guy" creator Seth MacFarlane, who has partnered with Google on an animated Web series and whose creations consistently rank at the top of Hulu's most-watched clips.

The Artist of the Year accolade is for Nine Inch Nails frontman Trent Reznor. A vocal critic of the mainstream music industry, Reznor has been skeptical of "innovative" digital distribution efforts and most recently lashed out at Apple on his blog for turning down a Nine Inch Nails iPhone app.

A new category, Breakout of the Year, joins the Webbys this year. It's been awarded to--surprise, surprise--Twitter.

The fact that the Webbys' top awards go to known entities isn't new. Its highest honors tend to go to mainstream celebrities who have built their fame offline and have then turned to the Web as a sort of experimental platform. Last year's Person of the Year awards, for example, went to comedian Stephen Colbert, director Michel Gondry, and Black Eyed Peas frontman Will.i.am for his YouTube sensation "Yes We Can" in support of Barack Obama's presidential campaign.

The Webbys ceremony is set for June 8 as part of Internet Week New York.

Ross Levinsohn of Velocity Interactive.

(Credit: Rafe Needleman/CNET)

LOS ANGELES--Ross Levinsohn, former president of Fox Interactive Media and now partner at media venture firm Velocity Interactive, spoke to the execs at the OnHollywood conference here Tuesday to deliver a warning to the entertainment industry: "Take action now or be replaced."

The nut of his argument (and hardly news, to be fair) is that media consumption is changing dramatically. The old ways are dying: Newspapers are drying up. Magazine publishing is off. Music revenues are down. Even DVD sales are slowing. And the areas that are growing--content downloading and subscriptions--run at lower margins than the media they're replacing. So it's time for fundamental change.

The good news, he says, is that there are areas of growth: Google searching is up (56 percent year over year), video streams are up (45 percent) and new platforms like Twitter are way up (2,565 percent yearly growth, he said). Three-quarters of Internet users watch online videos every month. Also, three-quarters of the top iPhone apps are games. There is a robust new entertainment economy. It's just not the old entertainment economy.

Levinsohn's favorite numbers: "29 vs. 8," which is the percentage of media consumption time consumers spend online vs. the percentage of ad spending there. Dollars follow eyeballs, he says, and this indicates a huge money-making opportunity for online content. But the old regime in Hollywood will miss the money boat if it doesn't change fast.

He cautions that "If Hollywood chooses not to act now, there will be a whole new set of owners." Those owners: Google, Apple, Cisco, and the like. But do these tech companies want to own Hollywood?

During Levinsohn's talk, I twittered his warning and got a pretty fast @ reply back from Dan Scheinman, SVP of the Media Solutions Group at Cisco. He said, "Cisco does not want to own H'wood! We want to make it $$$." I followed up with him after the conference.

"We're here to build value for Hollywood," Scheinman told me. "We can bring the assets together in a way that helps media companies make money."

Levinsohn likes these numbers.

(Credit: Rafe Needleman/CNET)

"Digitization and broadband are changing forever the consumer usage patterns. The consumer is far more in control," Scheinman said. Some in Hollywood are "trying to preserve existing business models while transitioning to the new world." He said that Cisco, "wants to work with these guys to work them through this," and by "work through this" I think he meant "help them to see the light and change course." But it was clear that Cisco is content to provide infrastructure technology to the entertainment industry. Scheinman doesn't want to see the Silicon Valley switch and router manufacturer in the middle of the content business.

Both Levinsohn and Scheinman quote Jeff Zucker of NBC Universal, who has famously said that in entertainment, analog dollars become digital dimes. Scheinman wants to help turn the tide on the lowering margins of entertainment content, and turn the digital content back into dollars. His prescription to reverse the course of declining margins has three steps:

1. Know the customers--something that's easier with metered and measured online delivery than it is with broadcast.

2. Technology needs to be an enabler, not a burden and not a threat. It's too expensive right now. Running Web sites, paying for bandwidth, and in some cases even paying the utility bills for new media technologies costs too much. Companies need to get aggressive about pushing the cost down.

3. Entertainment companies need to own their own data, which means opening a channel directly to consumers, even if there are middlemen distributors in the value chain.

At the beginning of his OnHollywood keynote, Levinsohn said that it "wouldn't be hard" to chart the correct course for the entertainment industry in the 15 minutes he was allotted to talk. Rather, in 15 minutes he very clearly laid out why the content industries need a financial reinvention. He was very precise about where Hollywood is leaking. Users are consuming content differently. But the important subtext was this: They're still consuming, and they'll still pay, either directly or through vehicles that monetize their attention, for quality entertainment and information.

Crackle, the video site owned by Sony Pictures Entertainment, has expanded its feature film lineup, which means that you can now watch "Groundhog Day" or "Spider-Man 2" at the office, if your boss isn't looking.

Crackle now hosts "nearly 100" full-length features, according to a release, and "dozens more" are on the way. There's also a pop-culture trivia game called "Crackle Cinemactive."

What's not clear is whether these movies will soon be on their way to YouTube, where Sony is one of a number of content partners that will be bringing TV and movies to the Google-owned video-sharing site. YouTube has agreed to use a Crackle player when showing Sony content, and Crackle will get a cut of the ad revenue.

Sony launched Crackle two years ago, a year after it acquired video site Grouper for $65 million. Unlike bigger video hub Hulu, a joint venture between NBC Universal and News Corp., Crackle has a target audience: men ages 18 to 34. That's what Sony hopes will make it more advertiser-friendly.

"Our movie lineup is unmatched online," Eric Berger, Sony Pictures Television's senior vice president of digital content, said in a release. "These are the movies that matter for guys 18 to 34, and this is the next step in creating our direct-to-consumer network."

Needless to say, MySpace is in a bit of a tight spot. The News Corp.-owned social network has been eclipsed in traffic by Facebook worldwide and may be close to losing its top spot in the U.S. And now, a management shakeup initiated by new News Corp. digital boss Jonathan Miller has seen the departure of CEO Chris DeWolfe and shuffling of president Tom Anderson's role.

Entrepreneur Jason Calacanis, who sold Weblogs Inc. to AOL when Miller was in charge over there, came up with a list of ten priorities for the incoming CEO. He's mostly right. But I think it's simpler than that: MySpace just has to put entertainment at the forefront of everything it does.

Facebook has won the social-networking battle, not to mention the reputation for tech cred, and no amount of developer-friendly initiatives is going to win that back for MySpace (a clear exception: social gaming, which is likely responsible for why MySpace's engagement metrics are notably better than Facebook's).

But MySpace has tech cred of a different sort. MySpace Music, the company's streaming audio service bolstered by investments from all the major record labels, is still a relatively new product but has been well-received. There are still loads of opportunities for this to grow more, from international expansion to merchandise and ticket sales. Some geeks are already impressed: When I was at Social Web FooCamp last weekend, one young entrepreneur told me that he didn't use MySpace as a social network, but as a music search engine.

MySpace Music, and surrounding entertainment content, should be at the center of the brand. The company has the opportunity--and the muscle--to fill the void of a mass-market entertainment power that MTV once held.

The first rule is that when it comes to entertainment content, MySpace can't settle for low quality or a poor fit. MySpace's first forays into original programming were notable misfires. "Quarterlife," which was distributed on MySpace as well as its own Web site, was a sleepy shoegazer better suited to the Sundance Channel. Faux-reality show "Roommates" was just tacky and poorly acted. Web audiences have become discerning enough so that they won't settle for public-access quality.

A couple of months ago, I went to one of MySpace's "secret shows" concerts, which featured singer Lily Allen at the Bowery Ballroom, a relatively small downtown venue in New York. I told one of my colleagues about it after the fact, and his response was, "Why does nobody know about these things?" If more people knew that logging into the right MySpace page at the right time could give you details about a cool free concert, I'm pretty sure there would be, well, more people logging into MySpace. There also wasn't nearly enough wielding of the MySpace brand at the show itself. It was one of those situations where a handful of stickers could've gone a long way in free advertising.

MTV in its heyday (and still, to an extent, today) understood the importance of in-real-life events in maintaining brand loyalty. "Secret shows" and movie screenings are part of that, but it can go even further. When I was growing up in the '90s, kids much cooler than myself would show up in Times Square to catch a glimpse of MTV's "Total Request Live" taping or to the "Beach House" that was set up in a different seaside town each summer. More recently, we've seen the success of Yelp parties: Rent a venue, invite avid users, and just let them hang out. They'll stick around online, too.

It's also got to be easy to find this stuff. MySpace's interface is so confusing to me that I've found it easier to discover new music through Apple's iTunes Store. Right now, half the home page is taken up by ads and the rest pertains to content ("Final Fantasy XIII" and "The Hills") that I have zero interest in. The site needs a real back-end overhaul, and maybe this is where one of Jason Calacanis' recommendations can come into play: Make some acquisitions. There are so many content discovery and recommendation apps out there, a few of which must be hungering for a buyout.

If people can be confident that MySpace is a reliable hub for finding insidery information about the latest in entertainment--fresh new bands, movie previews, the fall TV season, great Web video--that could be enough to get its momentum back. It might've started out with the tagline "a place for friends," but maybe the attitude should change to "a place to be cooler than your friends."

But, obviously, that wouldn't be the official tagline. Because then it'd be more like "a place for tools."