Amazon to launch a free music-streaming service? Wait, it already has one! Or perhaps not: Amazon Prime Music may be bundled into the company’s Prime membership so that it feels free to people signing up for free shopping deliveries, but it’s generally counted as a ‘subscription’ service for music-industry metrics. Un the US, the RIAA classes it as a “limited tier” subscription to differentiate it from full on-demand services (like Amazon Music Unlimited). Anyway: Prime Music isn’t “free” and it’s certainly not ad-supported. But Amazon may be about to unveil another tier of its music-streaming offering that is both of those things.
“Amazon has entered into discussions to launch a free, ad-supported music service,” reported Billboard, which bagged the scoop on this. “The world’s biggest e-retailer would market the free music service through its voice-activated Echo speakers, sources say, and would offer a limited catalog. It could become available as early as next week.” Which is this week, since the story was published on Friday. “To obtain licenses for the free music, Amazon has offered to initially pay some record labels per stream, regardless of how much advertising Amazon sells.”
Amazon has regularly proved itself willing to brave losses in the short term to build scale for the longer term, so this would not be a surprising strategy – even if it’s a costly one. Recent figures from research firm Strategy Analyticssuggested that Amazon shipped 29.7m Echo speakers globally in 2018. In the US specifically, meanwhile, eMarketer has predicted that 74.2 million Americans will use smart speakers this year, with Echos accounting for 63.3% of those people – around 47 million.
Free music on smart speakers isn’t a new thing: Google Home began supporting Spotify Free playback in August 2017, while Spotify announced in November 2018 that its free tier would now work on speakers using its Spotify Connect technology. However, you still need a Spotify premium subscription to listen to the service on Amazon Echo speakers – something that a free, ad-supported Amazon service on these devices would present a stronger competitive threat to. But the bigger picture here might be just the latest reminder that the large technology companies don’t just have devices that they can push their services through; they also have the ability to suck up costs (like Amazon’s reported plans for per-stream royalties) that pureplay rivals might balk at.