Report: Amazon Primes Spotify Alternative
Jan 29, 2016 1:19 PM PT
Amazon has held licensing talks with music industry executives in connection with its goal to launch a rival to Spotify, Apple Music and other streaming music services, the New York Post reported Wednesday.
The company is targeting a fall rollout, according to the report.
Amazon already offers 1 million tracks through its Prime Music service, but that pales in comparison to Spotify's 30 million-strong collection.
While the company likely will offer promotions to lure more consumers into its Prime ecosystem, the streaming service would stand on its own, according to the Post.
The plans reportedly are in the early stages. At the spear's head of the endeavor is Steve Boom, Amazon's vice president of digital music.
Amazon has all but settled on a price of US$9.99 per month, but it might offer a discount of $3 or $4 if bundled with its Echo speaker, based on the report.
Launching a music service would be evidence of Amazon's aim to position itself as the top source for all things entertainment, said Justin Hamel, CEO of MastaMinds.
"Amazon is going to eat a lot of people's lunches with this move," he told the E-Commerce Times.
Despite its foundation in Prime Music, Amazon will face challenges as it builds out a service capable of competing with Spotify and others.
"Music licensing is expensive, period," said Hamel. "Combine that with the fact they are going to be negotiating against Apple, who has piles of cash. I see some serious challenges to turn this venture profitable."
On top of licensing, Amazon with have to change the minds of customers already invested in Spotify and Apple Music.
"There will be some tough hurdles to motivate people to move off their current favorite music provider as well," Hamel noted.
In Its Prime
Amazon may be late to the streaming music market, but it's important to remember that the company has blazed the path in other avenues of media consumption and delivery, noted Jim McGregor, principal analyst at Tirias Research.
However, "we're still early in the game in terms of that transition from over-the-air and cable-based solutions to Internet-based solutions," he told the E-Commerce Times.
It's better late than never, McGregor said, and this moves makes since.
"A lot of these companies, whether it be Netflix or Amazon or whatever, are likely to eventually displace the traditional media companies we have today -- the CBSes and Foxes of the world," he said.
As a Prime customer who relies on a steady stream of gluten-free products for his wife and son, McGregor noted that Amazon has more than one type of bait to lure customers into its ecosystem.
"And once you're in that ecosystem, they make it very easy to use," he said. "And if [this streaming music service] is a part of the Prime service, better bet that anyone that's associated with that is going to leverage it. And I know I will."