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Amazon.com, Inc. (AMZN) Challenges Apple Music With Launch of Amazon Music Unlimited

Amazon.com, Inc. (NASDAQ:AMZN) took the wraps off its rumored new streaming music service this morning. Amazon Music Unlimited is now live and ready to take on Apple Inc.’s (NASDAQ:AAPL) Apple Music, Spotify and Alphabet Inc‘s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Play.

Amazon.com, Inc. (AMZN) Challenges Apple Music With Launch of Amazon Music Unlimited

Source: Amazon

Amazon clearly took the time to think this streaming music thing through, putting all the pieces together to hit the ground running with a competitive service right at launch. The press release sent out this morning ticks off all the boxes for competing against established services like Apple Music, Spotify and Google Play.

Key features of Amazon Music Unlimited include:

  • $9.99/month fee
  • 30 day free trial
  • App for iOS, Android and desktop offers curated music discovery
  • Ad-free
  • Download for offline listening
  • Support for streaming devices including Sonos
  • Personalized “stations”
  • Family subscription plan (arrives later this year) for $14.99/month

In addition, to matching key features and pricing of the competition, Amazon has responded to concerns that its music library would be seriously outclassed. Prime Music had only two million songs, compared to the 30 million claimed by Apple Music and Spotify. AMZN says Amazon Music Unlimited subscribers will have access to a catalog of “tens of millions of songs.”

That choice of words suggests that Amazon’s service might not yet be at the 30 million mark, but it’s probably close enough that most people wouldn’t notice.

Amazon Music Unlimited Is a One-Two Punch for AMZN

AMZN is actually fighting several battles at once with Amazon Music Unlimited, taking on two high tech rivals. It’s going toe-to-toe with AAPL’s Apple Music and while it will also battle Google Play on the streaming music front, the company is also taking a swipe at the new Google Home, which is in turn trying to knock out its Echo line of connected home speakers.

That all sounds a little complicated, but let’s start with pricing. Amazon Prime members get a discounted $7.99 Amazon Music Unlimited membership, or a yearly $79 fee (which works out to $6.58/month).

If you’re a Prime member, that significantly undercuts the $9.99/month going rate for everyone else.

However, if you own an Amazon Echo, that Amazon Music Unlimited membership fee drops to just $3.99/month. That’s unheard of pricing for streaming music without ads.

Better yet, with the Echo, you can use Alexa to control the music by voice, including picking artists, specific tracks and playlists. Alexa will also learn your listening habits and can play random music based on your preferences. AMZN has also created a new Echo-only feature called Side-by-Sides. When a user requests Echo to play a Side-by-Side for a supported album, the tracks will play as the artist provides song commentary.

The streaming music market experienced a shake-up when AAPL muscled its way in with Apple Music. So far, Spotify has managed to weather that storm, but having Amazon Music Unlimited to contend with as well is not going to help the situation.

Even worse is the potential for AMZN’s move to spark a three-way war for subscribers between Amazon Music Unlimited, Apple Music and Google Play. The three tech giants have deep pockets and could easily weather a price war. They also have machine learning capabilities they can leverage for features like personalizing music payback — as Amazon is doing with the Echo. Spotify, which lost $194 million last year, would be the likely loser if either scenario takes place.

Amazon Music Unlimited is available now.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/10/amazon-com-inc-amzn-challenges-apple-music-amazon-music-unlimited/.

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