Amazon is adding subscribers to its music-streaming service at a faster rate than rivals such as Spotify, Apple and Google, making music the latest industry to be disrupted by the ecommerce group.
The number of people subscribing to Amazon Music Unlimited has grown by about 70 per cent in the past year, according to people briefed on its performance. In April Amazon had more than 32m subscribers to all its music services including Unlimited and Prime Music.
By contrast, Spotify, the world’s largest streaming service with 100m subscribers, is growing at about 25 per cent a year. “Amazon is the dark horse [in music],” said Mark Mulligan, an analyst at Midia Research. “People don’t pay as much attention to it [as to Apple and Spotify], but it’s been hugely effective.”
Streaming has brought optimism back to the music industry after more than a decade in the doldrums. Amazon has a long heritage in music, selling CDs in the 1990s, but the company was late to streaming, launching Amazon Music in autumn 2016 — two years after Apple’s equivalent service debuted.
However, Amazon has gained momentum in recent months, propelled by its ubiquity with consumers and Alexa, its popular intelligent assistant, which can play music through voice commands issued to its wireless Echo speaker. “[Amazon] have gone all in on [music],” said a senior music executive at one of the major record labels. “We see high engagement on their service.”
It sells Amazon Music for $10 a month but that cost falls to $8 a month for Prime members and $4 a month for people who listen only on an Echo speaker. Apple and Spotify’s music services cost $10 a month.
Steve Boom, head of Amazon Music, said there was a gap in the market for middle America and older consumers. About 14 per cent of subscribers to Amazon Music are aged 55 or older, compared with just 5 per cent of Spotify’s customers, said Midia. “We’re not battling for the same customers as everyone else,” Mr Boom said. “For the industry to reach its full potential, we can’t just look at 15- to 22-year-olds.”
Mr Boom declined to comment on subscriber numbers, or on a high-
resolution audio service that the company is developing. Amazon does not disclose its revenues from music, but analysts estimate them to be a small fraction of its overall business.
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