As Amazon launches its standalone Music Unlimited streaming service, research firm Parks Associates has been reminding the industry of the popularity of the company’s existing Prime Music offering, based on its latest survey of Americans.
“Amazon Prime Music continues to be the clear market leader with a subscriber increase from 10% of broadband households in 2015 to 15% in 2016,” explained the company.
“With Amazon already the leader in this growing market, Echo owners could allow the giant to build on its lead. Currently, 7% of US broadband households use Spotify Premium, 5.9% use Pandora One, 5.3% opt for Sirius XM Streaming, and only 2.7% are Apple Music users.”
Parks Associates went on to suggest that Amazon had sold more than 5m units of its Echo, Echo Dot and Tap devices by the end of June – this compares to previous estimates of 4m Echo unit sales.
“The strategy of bundling entertainment and retail services together has served Amazon well. Expanding the benefits to Echo owners at a discount indicates a high level of confidence Amazon has in both its content services and its technology,” claimed the company.
That confidence is also reflected in Amazon’s apparent willingness to swallow the costs of discounting Music Unlimited to $7.99 for its Prime members.
Billboard claimed yesterday that while the new service’s payouts follow the standard market rates, Amazon is “paying for the difference on the $7.99-per-month option available to Prime subscribers, meaning it’s ‘losing’ $2 on each subscription”.
As ever, Amazon is playing a long game here: the more people use their Echo, the more tightly they’re bound in to Amazon’s overall ecosystem – shopping included.
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