Amazon launches streaming music service: Can it compete?

Once just a shopping site, Amazon hopes that Music Unlimited will increase the rate at which customers return to the site and allow it to compete with other streaming services.

Amazon/AP
Amazon Music Unlimited, a paid streaming music service from Amazon.com, will compete against existing services such as Spotify and Apple Music. It will cost $8 per month, or $79 a year, for members of Amazon’s $99-a-year Prime loyalty program. Non-Prime members will pay $10 a month, the same monthly fee charged by Spotify and Apple Music.

Amazon is introducing Music Unlimited, a streaming music service that it hopes can compete with Spotify, Apple Music, and the rest of the industry.

Amazon Music Unlimited offers three tiers of access to its 10-million-song archive: $7.99 per month or $79 per year for Amazon Prime members, $9.99 per month for non-Prime members, and a $3.99 per month subscription that will work only on Echo, Amazon’s voice-controlled speaker.

“It allows us to really expand the paid streaming music market,” Ryan Redington, director of Amazon Music, told Geek Wire. “Can we get more customers in by providing an entry price point tied to a specific, single Echo device?”

The Echo speaker connects to Alexa Voice Service and can respond to complex demands, such as “play Beyoncé's newest song” or “play that song that goes like…” following by whatever lyrics you remember from that one time you heard it on the radio. Amazon claims Echo will learn your music taste over time, to make personalized suggestions when given vague instructions like “play music for a dinner party.”

“We think the next big wave of growing the streaming market is the home,” Redington told GeekWire. “That’s why we’ve spent so much time on voice and getting that right.”

To woo the home audience, Amazon will soon offer a family subscription for $14.99 per month or $149 per year.

Echo subscription users may be limited for now, but Amazon has sold 4 million of the devices since it kicked off in late 2014 and is aiming for 10 million sales next year – perhaps spurred on by the reduced price of Amazon Music Unlimited for those who own the speaker.

Amazon already offered a music service to its Prime members, but with just 2 million songs, fewer playlists, and fewer personalized stations than Music Unlimited will offer.

Once just a one-stop shopping site, Amazon hope that the music service will increase the rate at which customers return to the site.

“A music service will further increase the daily interactions between Amazon and its customer base,” former music executive Jay Samit told Reuters in June, when rumors of a new Amazon music service began circulating.

Amazon faces enormous competition for the streaming music market, already dominated by Spotify, Apple Music, Google Play Music with its YouTube Red component, and Pandora, which recently expanded its monthly service to include a $5-per-month streaming service with more skips and replays.

Spotify in particular is growing rapidly, with 40 million paid subscribers this September, up from 30 million in March.

David Pakman, who headed early Apple music efforts, told Reuters that while Amazon Music Unlimited, which he called an "inevitable" step, would be unlikely to affect streaming music king Spotify, it might “might take a little oxygen out of Apple’s potential pool of paying users.”

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