Amazon Ties Digital Music Service to Echo Speaker and Alexa

Amazon debuted its streaming music service Amazon Music Unlimited, which costs $7.99 per month for Prime members and $3.99 a month for consumers who’ve purchased its Echo speakers. The Echo deal is significantly less than the $9.99 charged by Amazon’s many, already-established competitors. Amazon is also playing up another way Echo distinguishes its offering: a user can ask Echo’s digital assistant Alexa to play a band’s “new song” without knowing the title, a group’s music from a specific decade or a song based solely on its lyrics.

The Wall Street Journal quotes Amazon vice president of music Steve Boom as saying that the “disruptive price points” are likely to “really expand the streaming market.” He also noted the use of Echo as making streaming into “a communal experience centered in the living room, rather than on a smartphone.”

“In the digital era, [group listening is] one of the things that’s been lost,” said Boom.

Amazon_Echo_Tap

Features that add to that experience are the ability to “ask Alexa to play a commentary by an artist introducing and commenting on a playlist of his or her songs.” As each song plays, lyrics scroll across the screen on the devices (except the original version Echo which doesn’t have a screen).

Amazon’s director of product management and engineering, Kintan Brahmbhatt reports that, “if the company observes correlations between customers’ musical tastes and shopping habits for other products,” that information could play a role in its music suggestions.

According to Consumer Intelligence Research Partners, Amazon has sold “at least 5 million Echo devices to date.” Next up is a $50 Echo Dot. Amazon “sells many of its devices at close to cost” to encourage users to become Prime members. Prime members have access to Amazon Music Unlimited for $7.99 a month, with free access to the more limited Prime Music service. Everyone else pays the more standard $9.99 a month for Amazon Music Unlimited.

Recode notes that, “digital music services, most recently Apple, have tried pushing the retail price for on-demand music below $10 a month for years, without success.” With Amazon now offering a streaming music service at $3.99 a month, “we’ll have a real-world test of a theory some digital music executives have argued for years: If you lower the price for on-demand music subscriptions, you’ll sell many more subscriptions and the music industry will grow overall.”

Amazon is betting on much of its customer base hasn’t yet signed up for Spotify or any other music service. That’s a bet Apple made with its Apple Music, which now has 17 million subscribers.