When Amazon launched a free, ad-supported music-streaming service in April, it was only available in the US, for Echo smart speakers. That careful rollout is now expanding considerably: Amazon’s ad-supported music tier is now available in the UK and Germany too, through the Amazon Music smartphone app and FireTV devices as well as Echos.
Limitations remain: this is very much a ‘personal radio’ streaming service focused around stations (which can be based on songs, artists, eras and genres) as well as key Amazon-curated playlists (‘All Hits’, ‘Fuego Latino’, ‘Country Heat’ and ‘Rap Rotation’ as well as the Christmas-themed ‘Holiday Favorites’ are the ones cited by Amazon in its announcement). This isn’t yet a Spotify-style fully-on-demand free tier.
Amazon’s expansion of its ad-supported tier comes alongside the company’s latest offer for its Music Unlimited subscription service, with upgraders being offered four months of the latter for $0.99. The goal, it seems, is to move free listeners up the funnel as quickly as possible, be that to a standalone music subscription, or to a Prime membership with its separate, bundled Prime Music service.
How big a deal is Amazon’s ad-supported expansion? CNBC noted that Spotify’s shares fell by 4.9% yesterday after the announcement, although there were other stories (for example speculation that Bytedance’s streaming service could launch in December) that could have had an impact too.
One thing to bear in mind about Amazon’s news is the sheer scale of Prime already: it had 100 million global subscribers in April 2018, the first time it published a figure for this metric. A study by eMarketer in February suggested that there will be 63.9m Prime households in the US alone this year –representing 51.3% of American households overall.
Those people discovering Prime Music remains, we think, Amazon’s most important free (or rather ‘feels like free’) funnel into its multi-tiered music subscriptions. But expanding its ad-supported service to scoop up more non-Prime members is another sign of stealthy, steady progress from a company that reportedly had already reached 32 million paying subscribers by April this year.