Amazon.com has launched Amazon Music Unlimited, a full-fledged music streaming service offering low subscriptions at $3.99 per month for owners of its Amazon Echo speaker. Thus, Amazon has started a new trend toward more flexible pricing after years of sticking to $9.99 subscriptions.
Amazon Music Unlimited provides a large catalog of songs on demand. Besides subscriptions to play music on the Echo for $3.99, Amazon offers access beyond that device for $7.99 a month for members of Amazon’s Prime shipping and video service and $9.99 for non-members.
Prime members used to have access to more than two million songs, as well as over a thousand playlists and personalized stations. Amazon Music Unlimited takes a huge step ahead offering now tens of millions of songs from theÂ major labels Sony, Universal, and Warner, thousands of indies, as well asÂ thousands of playlists and personalized stations.
Amazon upholds its reputation and sets a low price for its streaming service. This shows that the music industry is beginning to accommodate consumers who are unwilling to pay $9.99 per month. Label executives were not ready to budge on price having their revenues degrading from the CD era.
Steve Boom, vice president of Amazon Music, believes that the new prices will expand the market.
“We’re moving music away from a one-size-fits-all approach,” he said. “We are the ones who have been pushing this the hardest.”
Traditionally, streaming services are supposed to pay most of their revenues to rights holders. Thus, Pandora and Spotify had to struggle to make a profit. In this regard, Amazon has one huge advantage – it can afford taking a loss on music streaming.
Competing at the crowded streaming market, Amazon is counting on the Echo that became a surprise last year when many started predicting that voice would become a key way users interact with technology. Echo is a smart speaker that responds to voice commands.
Amazon has developed a complicated system of voice controls for listening on the Echo. The company believes that music industry will benefit considerably from such smart home devices.
“The first phase of growth (in music streaming) was driven almost entirely by smartphones,” said Boom. “We believe pretty strongly that the next phase of growth in streaming is going to come from the home.”
Ted Cohen, managing partner of TAG Strategic, believes that consumers will be interested to listen to music on more devices despite that fact that the Echo-only subscriptions are so low.