Amazon’s New Music Streaming Service Features The Cheapest Plans Yet

10.12.16 2 weeks ago

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took one look at the crowded streaming-music marketplace and said “Why not us?” The tech giant just jumped into the digital fray with their new on-demand service called Amazon Music Unlimited. While some services have struggled to win ears away from Spotify, AMU may well have a chance to make significant waves in the world that the Swedish company largely dominates. Like Apple it already has a massive, built-in user base to target and — here’s the real kicker — it offers plans cheaper than any we’ve ever seen.

For years, $9.99 per month has been the bare minimum for streaming services. The streamers couldn’t stomach anything less and still pay the labels what they’d want. Instead, the streaming wars have largely consisted of fights to see who can craft the best user interfaces and land the most exclusives. But now, Amazon is offering plans as low as $3.99 per month and opening up a new front for companies to fight on.

Here’s how the various plans shake out:

  • $3.99 per month will get you ad-free access to a version of the service that only plays on Amazon’s smart Echo speakers.
  • Amazon Prime members can sign on to the service for $7.99 a month or $79 per year (which shakes out to about $6.60 per month).
  • Non-prime members will pay that same familiar price of $9.99.

According to Recode, the company was able to break the $9.99 barrier by convincing labels of future sales and agreeing to cough up a greater portion of their own proceeds. Via the tech website:

“It got the labels to agree to the $4 service that only works on Amazon devices by telling the labels that it would act as a gateway to more expensive services.

And it appears to have launched the $8 service simply by paying up: As far as the music labels are concerned, Amazon owes them as much for each subscriber on the $8 service as it does for $10 subscribers. That is: Amazon is subsidizing the difference.”

The Prime plan could lead many of the service’s 60 million subscribers to jump ship from whatever streaming service they’re already paying for to save a few dollars a month. And that’s before we widen the scope to include Amazon’s 300 million-person strong user base.

And the Echo plan is currently targeted at a small number of people — Amazon has only sold about 4 million of the speakers so far — but they plan to sell about 10 million more in the next year. The company hopes that the AI that powers the Echo will make for a more intuitive service where, for example, a user could ask for “happy music” and get a playlist of songs catered to their listening habits. They also expect the device to be able to pull up songs without titles if the users sing the words that they know to the speaker.

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