[audio-pals] Re: Amazon launches no-commercials, "free" music streaming for Prime members
- From: "Ray T. Mahorney" <mahorney.r.t@xxxxxxxxxxxxxx>
- To: <audio-pals@xxxxxxxxxxxxx>
- Date: Mon, 30 Jun 2014 01:38:39 -0000
the overall opinion in the tech community seems to be "who cares? about another
smart phone?"
Ray T. Mahorney
WA4WGA
-----Original Message-----
From: audio-pals-bounce@xxxxxxxxxxxxx [mailto:audio-pals-bounce@xxxxxxxxxxxxx]
On Behalf Of Josh
Sent: Sunday, June 29, 2014 20:32
To: audio-pals@xxxxxxxxxxxxx
Subject: [audio-pals] Re: Amazon launches no-commercials, "free" music
streaming for Prime members
The music streaming does not surprise me as much as I was surprised to learn
about the smart phone
that Amazon was marketing. I won der how it is.
-----Original Message-----
From: audio-pals-bounce@xxxxxxxxxxxxx
[mailto:audio-pals-bounce@xxxxxxxxxxxxx] On Behalf Of Ray T. Mahorney
Sent: Thursday, June 12, 2014 5:20 PM
To: audio-pals@xxxxxxxxxxxxx
Subject: [audio-pals] Amazon launches no-commercials, "free" music streaming
for Prime members
Amazon launches music streaming for Prime members
Jun 12, 2014 3:25 PM (ET)
By RYAN NAKASHIMA
Associated Press
http://apnews.myway.com//article/20140612/us--amazon_music-6bda69921c.html
LOS ANGELES (AP) - Amazon's newly announced music streaming service is yet
another attempt by the
company to move beyond e-commerce and infuse itself into the daily lives of
Americans with an
increasing number of offerings -including grocery delivery and streaming TV.
The announcement comes just days ahead of the expected unveiling of the
company's first smartphone.
Starting Thursday, Amazon.com Inc. will offer more than a million tracks for
ad-free streaming and
download to Kindle Fire tablets as well as to computers and the Amazon Music
app for Apple and
Android devices. The service, called Prime Music, is likely to be integrated
with an Amazon
smartphone expected to be previewed on Wednesday.
People who pay $99 a year for an Amazon Prime membership can listen to tens of
thousands of albums
from artists including Beyonce, The Lumineers and Macklemore & Ryan Lewis for
no extra cost. By
adding music, Amazon is hoping to hook new customers and retain existing ones
on its Prime
free-shipping plan, which also allows subscribers to watch streams of movies
and TV shows and gives
Kindle owners a library of books they can borrow once a month.
But the service has far fewer songs than services like Spotify or Rhapsody, and
no deal with
top-ranked Universal Music Group. Wedbush analyst Michael Pachter said the
service is not likely to
make a big impact on Prime membership. He said Prime members are likely to
already use other
streaming services so there is not much of a reason to switch to Amazon's
service.
"Very few people are going to use it, like Prime Instant Video, very few people
even know that
exists," he said. "We are Prime members because we want free shipping."
Steve Boom, Amazon's vice president of digital music, said the service will pay
for itself and isn't
part of the reason why the company raised the price of Prime from $79 in March
- a move Amazon said
would cover higher shipping costs. Instead, the company will benefit because
Prime members tend to
buy more from Amazon and remain loyal customers.
"If they come to Amazon for their music needs, they become better and
longer-term Amazon customers,
and we think that's a good thing," Boom said.
The deal comes on the heels of Apple Inc.'s announcement that it is purchasing
headphone and
music-streaming company Beats for $3 billion and is a further acknowledgement
of the rise in
popularity of streaming and the decline of digital downloads. U.S. sales of
downloaded songs slipped
1 percent last year to $2.8 billion while streaming music revenue surged 39
percent to $1.4 billion,
according to the Recording Industry Association of America.
Early results this year showed a further decline in music download sales, Boom
said.
"Music consumption habits are changing, which is why we started this,"
he said. "We saw the change happening."
Seattle-based Amazon reached licensing deals with most of the top independent
labels and major
recording companies Sony and Warner Music, but failed to reach a deal with
top-ranked Universal
Music Group.
That means that while the service will feature artists like Justin Timberlake,
Bruno Mars, Bruce
Springsteen, Pink and Madonna - it will lack music by Universal stars such as
Katy Perry, Taylor
Swift and Jay-Z.
The service also won't have many new releases - and for major artists that
could mean music that has
been released within the last six months.
Universal didn't reach a deal with Amazon because it disagreed with the value
of the lump sum
royalty payment on offer for the albums in question, according to two people
familiar with the
matter.
One person said the royalty amounted to about $40 million to $50 million for
the entire music
industry over two years.
Labels other than Universal concluded the amount would be equal to or better
than a per-play
streaming royalty, given how often the songs were played on other digital
services, the person said.
Both people were not authorized to speak publicly and spoke on condition of
anonymity.
Amazon will recommend songs to customers who have bought music from it in the
past with offers to
complete albums if they're available on the service.
It has also hired experts to compile hundreds of playlists that are 20 to 50
songs in length based
on genre or mood that are easy to download before getting on the subway or on a
plane, Boom said.
Amazon's strategy has long been to plow the money it generates back into its
business, focusing on
growth. The tactic results in thin margins, but investors largely give Amazon a
pass for forgoing a
strong profit for growth.
The company boosted its Prime 2-day shipping membership program annual fee from
$79 to $99 in March
to offset higher shipping costs. Since then, it has been adding services to
Prime membership to
attract new customers and encourage existing customers to spend more.
It started a service that lets Twitter users add Amazon.com products to their
carts without leaving
the social media site. In April, it launched Prime Pantry, a grocery delivery
service for Prime
members. The same month, it introduced Amazon Fire, its first set-top video
streaming box.
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