Amazon.com Inc. launched its long-awaited ad-free music streaming service on Thursday, intensifying the competition against Spotify, Pandora and Apple.
Prime Music offers about 1 million songs from thousands of albums for Amazons US-based Prime subscribers, who pay $99 per year for the subscription bundle which includes next-day delivery and other perks. Non-Prime customers will not have access to the feature.
The streaming service doesnt offer songs from Vivendi SAs Universal Music Group, the largest label, while Sony Music Entertainment and Warner Music Group, the second and third biggest, have agreed to license deals with Amazon but those tracks will generally be more than six months old. Although the service will not offer many new releases, it will be based on well-selected playlists.
Alice Enders, music industry analyst at research firm Enders, said, cited by the Financial Times, that the new music feature will still appeal to many customers, even without Universals catalogue. She said that Pandora, which has 77 million listeners, has proven that people are willing to listen to older songs as part of good pre-selected playlists.
Steve Boom, Amazons digital music vice president, said the company was still in negotiations with Universal, without giving any specifics. According to people familiar with the process, Universal was not satisfied with the licensing fees Amazon had offered and Amazon itself wasnt willing to pay what some labels asked for the newest tracks.
Amazons move reflects the companys efforts to become a key part of its customers everyday life, providing services from delivering online purchases to streaming music and video.
Steve Boom, Amazon’s vice president of digital music, said, cited by Bloomberg: “What started as a shipping service has evolved in to a membership service. We think we can bring great value to our Prime members and in doing so we can create deeper and longer-lasting relationships with our Prime membership.”
Prime Music is available on Kindle Fire and through Amazon apps on Googles Android software and Apple Inc.s mobile software.
Amazon.com Inc fell by 2.77% on Thursday to close the session at $325.91 per share, marking a one-year change of +18.17%. The company is valued at $149.97 billion. According to CNN Money, the 39 analysts offering 12-month price forecasts for Amazon.com Inc have a median target of $425.00, with a high estimate of $500.00 and a low estimate of $330.00. The median estimate represents a +30.40% increase from the last price of $325.91.
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