August 7, 2019
Now the world’s fastest growing music streaming service, Amazon Music Unlimited saw a 70% growth in subscriptions in the past year.
Each year music streaming is growing, eclipsing other music distribution options. Within the industry, streaming platforms are experiencing rapid growth in their subscribers.
The largest retailer in the world, Amazon launched their music streaming offering in 2016. They have two streaming options – Prime music and their premium offering Amazon Music Unlimited. This was a late entry to the streaming industry, with both Apple Music and Spotify already dominant in the market. However, despite this, Amazon is now the fastest growing music streaming service provider, boasting a 70% growth in subscribers in the last year – 3 times that of Spotify’s subscribers growth.
With similar sized music libraries to Spotify and Apple Music, why have Amazon’s music streaming services become the chosen music platform for 32 million users?
The popularity of the Echo
One of the major contributing factors to the success of Amazon Music Unlimited, is the popularity of its smart speakers, Amazon Echo. The widespread adoption of Amazon’s home assistant devices has contributed to music streaming subscriptions. Integration with Alexa technology makes it easy to access Amazon’s music services. Although the smart speakers have the capability to play music from competitors when users ask Alexa to play their favourite song Amazon Music is the default service. Subscriptions to unlimited music are also driven through large discounts for Echo users.
A Prime opportunity
One of Amazon’s main advantages is its direct route to consumers through Prime subscriptions. With over 100 million Prime users in the world, accounting for almost half of all US households, this is a huge market to sell their music services to. As part of the Prime package, subscribers have access to Prime Music, a light version with a library of 2 million songs. If they choose to adopt Amazon Music Unlimited, they will receive a significant discount. This freemium approach converts customers to adopt their streaming service over competitors.
Amazon is making its mark in the digital entertainment space. Its TV streaming service Prime Video has been widely adopted and has proved a real competitor for Netflix. This is in particular through its focus on high quality original content which has won the company awards and acclaim. This demonstrates credibility and advocates of its TV streaming service are also likely to adopt its music services.
A price that fits consumers
The price of streaming subscriptions can be a decision making factor for cost conscious consumers. Amazon Music Unlimited is available for as little as $4 per month for those who listen just through their Echo.
Focused on a different demographic to rivals
Amazon is targeting their music streaming services to those in the 55+ demographic with 14% of their subscribers in this age bracket, in comparison to just 5% of Spotify’s. Amazon Music Unlimited VP Steve Bloom shared that “For the industry to reach its full potential, we can’t just look at 15- to 22-year-olds”.
With Amazon establishing themselves in the everyday lives of consumers through Prime and the Echo, and now Amazon Music Unlimited they are sure to see further growth. Amazon will become an important source of license royalties for Copyright Management Organizations. This will mean an increase in streaming data and file formats adding to the complexity of processing log files and paying creators. The Spanish Point Matching Engine is already successfully processing Amazon streaming data at scale. To learn about our Matching Engine; built to manage the dynamic music streaming industry, its challenges and opportunities.