Published on October 12th, 2016 | by Alan Cross0
Amazon Gets into the Streaming Music Business and is Charging Less. (Sorry, Canada. This Not for You)
After months of hinting that something was coming, Amazon announced yesterday a new streaming music service with a monthly cost that’s less that Spotify, Apple Music, Google Play Music and the rest of them.
Amazon Music Unlimited is a new streaming service that costs $7.99 a month (or $79 a year) if you’re an Amazon Prime member (which itself costs $99 a year). Non-Prime members can sign up for the industry standard $9,99 a month.
The plan is (obviously) to steal subscribers away from Spotify and its competitors as well as to sell more Amazon Prime accounts–a pretty good perk (free next-day delivery!) for people who order a lot through Amazon.
And there’s more: If you have one of Amazon’s Echo units, it will be able to access the all the songs in the catalogue. All you have to do is ask it. On the downside, this Echo service costs $3.99 a month and is tied to just that one device.
Can it work? Well, there are more than 60 million Amazon Prime members globally and there are more than 300 million customer accounts (think of the credit card data!).
And before you ask, no Amazon Music Unlimited is not available in Canada, nor does it look like it will be coming here anytime soon. The UK, Germany and Austria are next.
Read more here. Meanwhile, Music Industry Blog has this to say:
Amazon’s announcement of its AYCE streaming service Amazon Music Unlimited should not come as a surprise to anyone whose been keeping even half an eye on the digital music market. Amazon are the sleeping giant / dark horse (select your preferred descriptive cliché) of digital music. With 60 million Prime Memberships it has a bigger addressable base of subscribers than Spotify, and its 300 million credit card linked customer accounts surpasses most but falls well short of Apple’s 800 million. Nonetheless, Amazon is the last major force to play its streaming hand. However, what the two really interesting things about Amazon Music Unlimited are its ‘reverse pricing’ strategy and the move towards Zero UI music experiences.
Sleeping Or Coma?
Being the sleeping giant of a space can work both ways. It normally implies major resources, a large legacy audience waiting to be tapped, and years of brand equity and trust. Amazon certainly ticks all those boxes, and some. But it can also mean that you’ve left it too late, allowing new entrants steal away your customers with new product offerings. HMV, Tower Records and Fnac were all sleeping giants but they all moved too late and too cautiously to be able to prevent Amazon, and then Apple, and then Spotify from stealing their customers. Things should though, be different for Amazon and streaming. Although streaming is growing fast we are still short of 100 million subscribers globally and in most markets subscriber penetration is below 10%. Even more importantly, the majority of adoption is being driven by music aficionados (those consumers that spend above average time and money with music). The next opportunity is the engaged end of the mainstream. This is where Amazon plays best.