Ama­zon launches for-pay stream­ing mu­sic ser­vice

Daily Local News (West Chester, PA) - - BUSINESS - By Mae An­der­son

NEW YORK » Ama­zon is launch­ing a paid stream­ing mu­sic ser­vice, the lat­est en­try in an in­creas­ingly crowded field.

Ama­zon Mu­sic Un­lim­ited is be­ing po­si­tioned to com­pete against ex­ist­ing ser­vices such as Spo­tify and Apple Mu­sic. It will cost $8 per month, or $80 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.

Own­ers of Ama­zon’s Echo smart speaker, mean­while, will

be able to get the un­lim­ited mu­sic ser­vice on one de­vice for $4 per month.

The steam­ing ser­vice is one more perk — like two­day free ship­ping and Ama­zon Video — that the Seat­tle­based com­pany hopes will at­tract peo­ple to its Prime pro­gram and thus en­cour­age them to spend more on its flag­ship site. Ama­zon al­ready of­fers Ama­zon Prime Mu­sic for free to Prime mem­bers, but that in­cludes about two mil­lion songs, while the new ser­vice boasts a cat­a­log of “tens of mil­lions” of songs.

“Think of this as two dif­fer­ent lev­els: Prime is now the in­tro­duc­tory ser­vice and Un­lim­ited is the full ser­vice,” said Steve Boom, Ama­zon’s vice pres­i­dent of dig­i­tal mu­sic.

The ser­vice’s launch comes as the way peo­ple lis­ten to mu­sic is chang­ing. Ac­cord­ing to Nielsen , dur­ing the first half of 2016, dig­i­tal pur­chas­ing of sin­gle tracks was down 24 per­cent and dig­i­tal al­bums were down 18 per­cent, while stream­ing was up 59 per­cent, com­pared with the same pe­riod a year ago.

“The recorded mu­sic in­dus­try has been fum­bling for a dig­i­tal busi­ness model that re­ally works, and I think stream­ing has come into its own,” said eMar­keter an­a­lyst Paul Verna.

In fact, stream­ing of au­dio has eclipsed video stream­ing, ac­cord­ing to Nielsen. Au­dio’s share of stream­ing is 54 per­cent as of June 30, com­pared with 44 per­cent a year ear­lier.

But it still faces the mu­sic in­dus­try’s prob­lem of low mar­gins, Verna said.

“There is def­i­nitely room to grow the pie sim­ply be­cause more and more mu­sic con­sumers are choos­ing this way of ac­cess­ing their mu­sic,” he said. “But the po­ten­tial re­wards are not huge and in­fi­nite, they’re sort of mod­est and there are al­ready quite a few play­ers in the space.”

Most stream­ing ser­vices now of­fer sim­i­lar cat­a­logues of mu­sic and pric­ing is about the same. So ser­vices have dif­fer­en­ti­ated by user in­ter­face, Verna said.

One way Ama­zon is hop­ing to stand out is with its Alexa voice con­trol, via the Echo or other Alexa-en­abled de­vices. Users can ask the Echo to play a cer­tain song or playlist, but can also search for mu­sic just by say­ing they want to hear the “new” song by any artist, a genre of mu­sic from a cer­tain decade, or by say­ing the lyrics of a song if they can’t re­mem­ber the name.

The ser­vice is avail­able start­ing Wed­nes­day in the U.S. and in the U.K., Germany and Aus­tria this year.

On­line: www.ama­­zonMu­sicUn­lim­ited

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