October 12, 2016:Amazon Music Unlimited joins the battle of the streaming funnels

There are few surprises but plenty of talking points in Amazon’s launch today of its long-rumoured Amazon Music Unlimited standalone streaming service. It’s available in the US today, with the UK, Germany and

It’s launching with the standard $9.99-a-month price, but a two-dollar discount for Amazon Prime members, who currently get free access to the limited-catalogue Prime Music service. As predicted, there is also a cheap option tied to Amazon’s Echo speaker: $3.99 a month but without the ability to listen on smartphones, tablets and PCs.

Additional points: Amazon is offering a $79-a-year option for Prime members which brings the monthly cost down to $6.58, with a $14.99-a-month family plan for up to six people “coming soon” to match the offerings of Spotify, Apple Music and other rivals.

Echo and its Alexa voice assistant are the most interesting aspects here. Naturally, Echo owners will be able to control Music Unlimited with voice commands, just as they already can for Prime Music, Spotify and Pandora.

However, there will be a range of specific commands too, from ‘Play Music’ to play a personalised mix of songs, to ‘Play [Artist Name]’s new song’ and ‘Play music for a dinner party’ – the latter tapping Amazon’s catalogue of themed playlists. At this point, the intricacies of voice control look like the main advantage over rivals, although it’s debatable how big a selling point that is.

“The first thing we wanted to do was provide that full-catalog music service… that’s a no-brainer,” VP of digital music Steve Boom told Wired in an interview.

“But looking at how people were listening to music in the Alexa environment, it’s a different experience than doing it on their phone or on their laptop. You talk to her naturally, you talk as if you’d talk to a friend about music. It forces you to reimagine how people interact with a music service.”

That’s the bigger picture here: interaction with music within the home. “Historically, the home market has been driven by smartphones. Amazon has established a really strong position there, and voice is the interface for that environment,” claimed Boom.

Yet Google’s new Home speaker (bundled with its own music services); Apple’s rumoured similar product in development; and Sonos’ desire to make voice control a much bigger part of its devices show that Amazon is far from the only company thinking along these lines.

The other important question about Amazon Music Unlimited is whether it can provide yet another funnel of music fans new to paid subscriptions. Apple Music’s emergence appears to have generated new subscribers rather than simply churned people over from Spotify, and the industry’s hope is that Amazon can follow a similar path.

Amazon has sold more than 4m Echo speakers so far and reportedly hopes to sell 10m more in 2017, which makes an excellent base for the $3.99 tier: surely a decent-length free trial will be bundled with new Echo purchases sooner rather than later?

But it’s the wider Prime membership – estimated at 63 million people in the US alone – that offers the big potential here for turning mainstream music fans into $7.99-a-month music subscribers.

The existing Prime Music has long been a dark horse in the music-streaming market. In March, research firm Parks Associates claimed it was the most popular paid music subscription service among US broadband households, while in June analyst Cowen ran a study that found 16% of US respondents using Prime Music, behind only satellite radio at 22%, but more than double Spotify Premium (7%) and Apple Music (6%).

Can Amazon Music Unlimited have a similar impact? 2017 is shaping up as a very interesting year in the US, with regards to taking streaming even more into the mainstream.

It will rely on Amazon successfully converting a portion of its massive customer base; on Pandora upselling a decent chunk of its 75m+ free listeners; on Spotify and Apple Music’s marketing efforts; and on the device integrations of another pair of dark horses: Google Play Music and YouTube Red.

Genuinely competitive times then, even with the concern – which has been talked about increasingly loudly in recent months – that the independent services in that list (Spotify and Pandora) are going up against tech giants with significantly deeper pockets.

Still, if the key to subscriptions growth is the size and quality of your customer funnel, then the battle between services with tens of millions of free listeners, device owners and now e-commerce members is an exciting prospect.

Stuart Dredge
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