Amazon to introduce free music streaming service
Come for the music - stay for the shopping.
Amazon is rumoured to be offering a free music tier that would put it in direct competition with Spotify’s similar entry level band.Citing sources familiar with the plan, Billboard reported that Amazon would create the service as a free, ad-supported adjunct to its existing music offerings, which include Prime Music (part of the Prime membership fee) or their premium Amazon Music Unlimited service which has various subscription options to access its 40 million song catalogue. Prime Music is limited to a few million songs.
Spotify is the only other major music subscription service that offers a free option and it is this approach that has allowed it to capture 96 million paying users alongside its 116 million free users. The next largest player is Apple Music which boasts 56 million subscribers but has no free on-demand option. Apple’s success is largely driven by its huge existing smartphone customer base.
The free service offered by Amazon would have limitations on the catalogue available to listeners though there’s no details yet about the number of songs available or any listening restrictions such as Spotify’s free approach which plays artist tracks in a random order. Amazon is understood to be paying record companies on a per stream basis regardless of revenue generated by the advertising.
Amazon plans to advertise the free service via their popular Echo speakers and the prospect of being able to request any song (catalogue dependent, of course) to be played with no faffing around other than a simple voice request is likely to be attractive to the casual music fan.
Amazon reportedly has ‘tens of millions’ of subscribers to its Amazon Music service and offers no projections about how many free users it expects to move over to paid for music. The likelihood is that it is not too concerned since, despite Amazon Music’s subscriber base, it is still a loss leader. What’s important to the company is users ‘come for the music and stay for the shopping’ and Spotify just doesn’t have this option to support its business model.
In fact, it was reported that Spotify shares fell by 4% as news of Amazon’s plans unfolded, adding to their woes in the face of strong competition from the likes of Google Play Music, Youtube Music and the aforementioned Apple Music.
Reportedly, Amazon’s new service could be rolled out by as early as next week.
Source: www.billboard.com, www.telegraph.com,
Image Source: www.gizmodo.com.au
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