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Speculation widens about Amazon streaming service

By | Published on Monday 3 March 2014


There has been chatter in label circles for sometime that Amazon is plotting a streaming service, and last week speculation that the leading online retailer could soon launch a Spotify competitor (or “Spotify killer”, as some prefer to call it) widened, though it doesn’t seem likely said launch is actually any closer now than it has been for while.

Last week Amazon did rebrand its video streaming service in Europe, bringing LoveFilm Instant in line with its US counterpart, so that it’s now simply called Instant Video, or technically Amazon Prime Instant Video, because the streaming set up is being bundled in with the retailer’s added-value (mainly free next-day delivery) customer club.

All of which would make the addition of an Amazon Prime Instant Music add-on as part of the same package neater from a branding point of view. And according to re/code, talks have been ongoing for a few months now between Amazon and the labels about licensing a streaming music service. Though, unsurprisingly, price is a sticking point.

Like Apple, when it licensed its iTunes Radio service, Amazon isn’t so keen on paying the same rates as the heavily-financed loss-making start ups in the streaming audio space. But the labels aren’t especially keen on giving Amazon too much of an advantage over Spotify et al, the money coming in from the standalone streaming firms being an increasingly important revenue stream for the record companies.

Amazon has indicated that it’s willing to increase the price of its Prime service at it beefs up the customer club offering. Indeed the price in Europe technically went up last week, in that you can no longer get Prime without the streaming video option, and with video added in the annual fee is £30 higher. Meanwhile in the US the retailer has indicated it might increase the Prime subscription there to about $10 a month.

Though, that’s still the same as the monthly premium rate for the standalone streaming music platforms (the ones that offer fully on demand functionality), and if Amazon wanted to offer video, music, ebooks and free delivery for Prime users – which it sounds like it might – then it’s not going to be able to set aside 70% of the revenue for just the record companies and music publishers, as Spotify et al basically do.

Presumably Amazon will be telling the labels that, because of its existing massive customer reach, not to mention its dabblings in the hardware space, it is equipped to take streaming content mass-market in a way the start-ups cannot. The etailer may also be insisting that its streaming service could result in the upselling of CDs and downloads, though Apple said the same (re downloads anyway) about iTunes Radio, and all indications suggest the track sale up sell there has not been overly impressive.

But, it has to be said, there is a strong argument that the mass market subscription music service everyone aspires to create possibly can’t be achieved by just providing audio, ie ultimately we’re heading to a place where all the key subscription content platforms offer music, film and TV content on-demand. And if that’s right, Amazon is a definite contender to lead that market.