Amazon.com Inc (AMZN) to Unbundle Prime with $5 Music Streaming Service

Amazon.com Inc (NASDAQ:AMZN)

Amazon.com Inc is out to challenge Spotify, Apple Music, and Pandora as it prepares to launch another music streaming service. Of course, Prime members are able stream music at no added cost as part of the bundled offer for prime members. However, the online retailer thinks it could have a bigger footprint in the music streaming industry by launching a new standalone music streaming service. Jeff Bezos wants you to stream music for a monthly fee over its Amazon Echo hardware.

Stream music on Amazon Echo

The tech space is abuzz with rumors that Amazon is about to a launch a music streaming service that will be tethered to Amazon Echo. The music streaming service won’t work on phones, but it can easily turn the Echo Bluetooth speaker into a boombox. Amazon also wants the service to be ultra-cheap at $5 per month. Despite its relative cheapness, it promises to be ads-free while delivering unlimited music streaming.

Most music streaming services operate in the $10 per month range and the few streaming services priced at $5 per month are usually web radio services. However, the fact that Amazon promises unlimited streaming at $5 might provide music lovers with enough reason to switch over to Echo.

Nonetheless, the firm might not find it easy to have a breakthrough in the music streaming industry because of the required hardware constraints of the Echo Bluetooth speaker. Amazon Echo is a smart Internet-enabled speaker that the online retail sells it its hardware division. Echo has an in-build digital personal assistant called Alexa. Alexa has a number of skills, which includes controlling lighting, temperature, and controlling your car from the garage among others.

The first step towards unbundling Prime

Amazon has been working strategically to unbundle the offerings in its Prime membership service in order to attract people who don’t shop with Prime. The Prime membership service provides members with free shipping on qualifying orders, faster shipping times, unlimited movies streaming, unlimited music streaming, and access to audiobooks.

Earlier this year, online retail giant revealed that people who are not Prime members could subscribe to its video subscription service for $9 per month.  Now, the firm is planning to offer its music streaming service as a standalone service for $5 a month. It is still too early to know if the firm will succeed in getting people to buy its Echo device or sign up for its music-streaming service – only time will tell.

Would you use a Bluetooth speaker to stream music?

Amazon has sold about 1 million units of echo since its launch and the firm plans to sell about 3 million units by 2017. The problem however is that the number of people that own an Echo device pales significantly in relation to the number of people that use smartphones in the U.S. alone. Hence, even if Amazon were able to convert all the 3 million users of Echo to sign up for its music streaming service, it would still have only a small slice of the market.

Most people use music-streaming services on their phones because it affords them the opportunity to listen to music on the go. Apple Music was initially targeted at iPhone users before Android users started coming up on board. Other music services such as Spotify and Pandora are also predominantly geared for mobile devices. Hence, many people might find it somewhat cumbersome to go around with a Bluetooth speaker.

However, Amazon is still in the process of working out deals with record labels and artistes. If Jeff Bezos succeeds in signing the big names in the music industry to his streaming service, cheap, ads-free Amazon Music might encourage people to buy an Echo device.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.


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