Amazon.com is adding a streaming music service to its Amazon Prime membership benefits.
The service, called Prime Music, allows Prime members in the U.S. to stream songs, ad-free, and download them for offline listening as long as the listener’s membership is current.
More than a million songs are available at launch Thursday, accessible and downloadable at no additional cost to the membership fee, which Amazon recently raised from $79 to $99 a year.
The service will not include new songs on their release dates, though it will include many songs from the Billboard Hot 100, said Steve Boom, vice president of digital music for Amazon.
Artists from Warner Music Group, Sony Music Entertainment and a number of independent labels are included. But artists from Universal Music Group, the world’s largest music label, aren’t.
“Conversations are ongoing” with Universal, Boom said.
“We’re not promising customers a comprehensive service at launch,” he added. “But what I would say is this: It’s a huge catalog of music. And if there’s something you’ve just got to have right now, obviously, we operate a very good music store.”
Prime members will be able to create their own playlists that include the streaming songs, and listen to and download playlists created by DJs, recording artists or music publications.
The service will also include personalized recommendations, much as Amazon already does with its video and shopping recommendations.
Prime Music can be accessed through the Amazon Music app — previously called Amazon Cloud Player — on the Kindle Fire, iOS and Android platforms, via desktop clients for Windows and Mac, and through any Web browser.
Amazon has not created a music app for the Windows Phone or the tablet-specific Windows RT platforms.
The streaming music service is only for U.S. Prime members, even though Prime is now available in eight countries including the U.S.
“We certainly would like to roll this out to other countries, but we have nothing to share today,” Boom said.
He declined to say how many Prime members there are, other than “millions in the U.S. and tens of millions worldwide.”
Amazon decided to add streaming music to its list of Prime benefits, which include two-day shipping on store purchases, streaming instant video, and a lending library that allows Kindle users to borrow one book a month.
In determining what to add, the company “looked at services that have broad appeal, services that people interact with on a frequent, even daily basis,” Boom said. “Music fits that bill, like video and shopping do.”
Negotiations with the music companies began about six months ago but slowed when those companies considered Amazon’s offers too low, according to a New York Times report.
“Amazon told most small labels that in exchange for one-year licensing agreements they would be offered shares of a $5 million royalty pool, to be divided by a market-share formula of Amazon’s choosing,” while bigger labels and distributors “were offered larger one-time payments for access to certain titles,” according to The New York Times report. Amazon initially offered $25 million in such fees, though that figure may have changed in negotiations, the report said.
Amazon will have to get Universal, whose artists include Lady Gaga and Jay Z, if it intends to make its Prime Music a serious competitor to streaming music services such as Spotify and Pandora, said Mike McGuire, an analyst with research firm Gartner.
“If Amazon is trying to make people take a second look at their existing services, it’s probably going to have to have the largest label,” he said.
Offering streaming music, though, is a way to capture where the growth is in the music industry these days.
“In terms of overall revenue, a lot of it still comes from downloads,” McGuire said. “But the growth in revenue and usage is through these streaming services.”
It also makes sense in terms of keeping Prime members satisfied and engaged.
“If I’m streaming music, I’m probably not staring at the software player,” McGuire said. “I’m probably looking at some item on Prime I might buy.”
Source: MCT Information Services