Amazon joins music wars with new streaming service

Online retail giant Amazon (above) has started a music streaming service to take on rivals like Spotify and Apple.
Online retail giant Amazon (above) has started a music streaming service to take on rivals like Spotify and Apple.PHOTO: REUTERS

NEW YORK (AFP) - Online giant Amazon entered the streaming music wars on Wednesday (Oct 12), taking on rivals like Spotify and Apple with a subscription service that offers discounts to those using its voice-controlled speakers.

Amazon Music Unlimited will offer "tens of millions of songs" to subscribers, the company said, a step up from the two million available on its existing Amazon Prime streaming service.

The new service costs US$9.99 (S$13.80) a month for US customers - the same as rivals Spotify Premium, Apple Music and Google Play - but Amazon is offering a discounted rate of US$3.99 for subscribers who limit use to its Echo, Dot or Tap speakers.

Current Prime customers can get the new service for US$7.99 a month or US$79 a year, Amazon said.

The new service is available to US customers, and will launch later this year in Britain, Germany and Austria, the company said in a statement.

"Amazon Music Unlimited brings real value to the millions of people who are already Prime members," said Amazon founder and chief executive Jeff Bezos.

"And if you want a sense of the future of voice-controlled music, go ahead and ask Alexa (Amazon's digital personal assistant) for a free Music Unlimited trial, and play around on your Echo," Bezos said.

"If you don't know the name of a song but know a few lyrics, if you want to hear songs from a specific decade, or even if you're looking for music to match your mood, just ask."

Dan Rayburn, a Frost & Sullivan analyst who follows streaming media, said the new service offers "a nice tie-in to Amazon's Echo, something that the other services don't have."

Rayburn noted that streaming music is "a challenging market, with nobody making money" but that Amazon can afford to offer lower prices with incentives for its hardware and Prime - a service which offers discounted shipping, access to online video and other content.

"It's very hard to make money when you're a standalone service like Spotify," Rayburn said.

"Amazon doesn't need to make money on this because they can push their other devices. They're using it as a catalyst to sell more stuff."

Echo is Amazon's home hub, powered by artificial intelligence to answer questions, control smart appliances, order merchandise from the online giant and play music.

Music streaming has boomed this year, with the number of streams more than doubling in the first six months of the year compared to the same period last year, according to trade specialists BuzzAngle Music.

In the United States, streaming services had 18.3 million subscribers in June, up from 9.1 million at the same time last year, according to the Recording Industry Association of America, Amazon's new US offering comes a month after Sweden's Spotify said it had passed 40 million paying subscribers, consolidating its position as world leader in the streaming sector.

Spotify stands well clear of its nearest rival Apple Music, which had some 17 million paying subscribers as of September, but it has yet to post an annual profit, spending most of its revenue on compensating artists and rights-holders.

Streaming music services are also offered by Google, Pandora and a number of other groups.

Pandora this week debuted its latest offering, a US$5 a month service which lacks some of the features of Spotify and others but is ad-free and allows users to skip or repeat songs.

Last month Norwegian media said the Tidal streaming service, owned by rap megastar Jay-Z, had posted heavy losses and was having problems making payments on time.

Tidal had a major boost earlier in the year when Beyonce - who is married to Jay-Z - released her album Lemonade exclusively on the service.