As the era of music CDs seems to come to an end several companies focus since the past years on offering music streaming services online.
Spotify and Apple Music are big well-known players in the online music streaming industry. These online music streaming providers offer often a free version with limitations such as a maximum number of skipping the song per hour, commercials after playing a few songs, lower music quality, etc. After signing up for the subscription of about 10$ a month, there are no limitations and you can stream all the music you can, wherever you want.
Now Amazon announced that the company will launch a music subscription service within the next few weeks that would work basically in the same way as Apple Music, Spotify and other music service providers, which you can stream anywhere you want on any device for a subscription of $10 a month.
Additionally, Amazon announced that they will also offer a different kind of music streaming subscription for just 5$ a month. This subscription will only allow you to listen to the music on Amazon’s Echo player (Kafka, 2016). Amazon launched the Echo last year, as an internet connected music speaker powered by Alexa. Alexa is Amazon’s Artificial Intelligence software. Furthermore the subscription of 5$ a month won’t allow you to use Amazon Music on mobile devices (Singleton, 2016).
A lower priced service of 5$ a month has been implemented before by other companies. However, those were usually variants of web based radio services, which didn’t enable users to pick any song they liked, whenever they wanted to listen to that song.
Amazon shows a new twist in the music streaming industry market. The company tries to make use of a positive sales result of their hardware product. By promoting their hardware product Echo, they attempt to influence consumers to purchase the Amazon Music subscription of 5$ a month. After their introduction of the Echo player last year, they sold already about a million units. Their information reports shows that they aim to sell another three million units this year, and 10 million in 2017 (Efrati, 2016).
Therefore the other music streaming providers should definitely keep an eye on the new service of Amazon, since they never know how loyal their consumers really are when pricing strategies are involved.
Resources:
A.Efrati. 2016. [online] Accessed by: https://www.theinformation.com/amazons-high-hopes-for-echo-sales
M.Singleton. 2016 [online] Accessed by: http://www.theverge.com/2016/10/6/13190540/amazon-music-service-echo-streaming-launch
P.Kafka. 2016. [online] Accessed by: http://www.recode.net/2016/8/22/12593158/amazon-music-echo-alexa
Hi Jetta, thanks for your post. Next to the possibility to bundle the music service with hardware as to offer it for a lower price, I think that there are a few other reasons why Amazon is well positioned in music streaming. Although music streaming as a service is still very young, Amazon has been selling people MP3s and CDs for years. This means that they exactly know what music customers like and can offer better recommendations from the start of a user’s subscription on. Next to that, it can cross-sell other products such as vinyls, dvds, merchandise, or even tour tickets. They even already applied this on Coldplay tickets for which they gave early listeners priority access to a tour (Trenholm, 2016).
Trenholm, Richard. “What Amazon Music Can Do That Rival Streaming Services Can’t”. CNET. N.p., 2016. Web. 24 Oct. 2016.