Rumors are swirling that Amazon is planning to take on Spotify by launching its own free music streaming service. Amazon plans to expand its dominance of e-commerce and its inroads into TV and movie streaming available through its Amazon Prime Video service, according to Billboard.
The service is rumored to be ad-supported, so it sounds like this won’t be a way to escape Spotify’s famously annoying ads. But this could be a way for customers to listen to music for free without having to shell out for an Amazon Music Unlimited subscription.
One big open question is how large a library of songs will be available through the potential Amazon free streaming service. Other competitors to Spotify, such as Tidal, have had issues getting the rights to stream a large selection of songs. Amazon may have an advantage here as it has an existing relationship with record labels due to its CD sales. And apparently Amazon has offered to pay labels for the music that it streams, regardless of the ad revenue that the streams generate.
The competition isn’t only from existing streaming services though. A whole lot of people use YouTube as a free music streaming service, so Amazon may be banking on the ability to persuade these people to start using their service instead. As a brand with huge name recognition — it seems like everyone has an Amazon Prime account these days — Amazon could be ideally placed to lure people over.
The ease of integrating music streaming with its Alexa smart speakers could be a tempting option for customers too, as a 2018 study found that playing music was the most common use of smart speakers.
Amazon’s existing Prime service costs $119 a year and includes free deliveries for Amazon orders, and it additionally sells access to Amazon Music Unlimited for $9.99 a month or $7.99 for Prime members. Its ambitions towards smart speaker integration are clear as it also offers a cheaper $3.99 a month subscription for those who listen only on their Echo device.
With that said, Amazon doesn’t share numbers on how many customers are currently paying for its music subscription service. It would be hard put to compete right now with Spotify’s over 200 million users, SoundCloud’s 175 million users, or Apple Music’s 50 million users. Estimates are that Amazon has around 16 million users, so they’re clearly looking to increase their market share with this new reportedly free streaming option.
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