How Will Amazon Challenge Spotify and Apple in the Music Space?



Amazon launches Music Unlimited

Earlier this month, Amazon (AMZN) launched Music Unlimited, challenging on-demand streaming market leaders including Apple (AAPL) and Spotify. While Amazon’s Prime Music had approximately 2 million tracks, Music Unlimited has “tens of millions” of tracks. Non–Amazon Prime members can subscribe to a plan for $9.99 per month whereas Prime members can access this service at $7.99 per month or $79 per year. A family plan for Music Unlimited is $14.99 per month or $149 per year.

Music Unlimited offers a number of features, including AI (artificial intelligence) integration and “offline caching.” Customers can request Alexa, Amazon’s voice assistant, to play a particular kind of music or a song by a particular artist.

Amazon has a 30-day trial period versus Apple’s three-month trial period. Though Spotify is free, subscribers have to pay for “Premium Benefits.”

Apple Music immensely popular among users

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J.D. Power’s “Streaming Music Satisfaction Study” names Apple Music (AAPL) as the top-rated music streaming service. According to the study, 35% of respondents were “strongly committed” to Apple Music. In comparison, 30% of respondents were strongly committed to Spotify and Google Music (GOOG)(GOOGL).

A large proportion of subscribers (almost 62%) stated that compatibility with devices was the main reason to sign up for Apple Music, compared to 53% for Google Play Music and 52% for Spotify.

Apple Music now has over 17 million subscribers, up from 15 million in August 2016 and 11 million in March 2016. Apple still trails market leaders Spotify and Pandora (P), which have 100 million and 80 million subscribers, respectively. However, Spotify has only 30 million paid subscribers, and the firm took almost ten years to reach this figure.


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