Echo device owners can listen to Amazon music for free, but there are ads
Alexa, play music. No, not that music, the other one.
Late yesterday, Amazon announced its ad-supported music streaming service for Alexa-enabled devices. Now, anyone in the US who owns an Echo smart speaker can listen to the same library of 2-million songs that previously was only a perk for Prime members.
Amazon is likely hoping that the free, ad-supported service will be a sales funnel to up-sell to one of its paid offerings. Amazon Music Unlimited is $3.99 monthly per Echo device or $9.99 monthly to stream on any device, both attractive offers. As the ad-supported tier is only on supported Alexa-enabled devices, Amazon already has an advantage to competitors like Spotify – a captive audience.
It’s a double-windfall for Amazon, as it also provides a way to monetize all of its Echo devices once they leave the warehouse
Amazon will be looking to grow the percentage of revenue coming from selling advertising space, which totaled $10.1 billion in 2018, only 4.3-percent of total revenue.
Amazon has long been quiet on subscriber figures, but analysts estimate them a close third behind Spotify and Apple Music, who take the no. 1 and no. 2 spots, respectively. Spotify has 96 million paid subscribers and 116 million users on the ad-supported tier. Apple Music has 56 million paid subscribers, without the presence of an ad-supported, free tier.
With Amazon and Google settling (most) of their differences this week, the number of devices that can be used for Amazon’s other streaming services just ballooned. Google did beat Amazon to the punch with music streaming however, announcing that a free, ad-supported version of YouTube Music will be available on all Google Home devices.
The market for smart speakers hit critical mass last year, with roughly 41-percent of US households owning a voice-activated speaker. Amazon has the lion’s share of that, with 66-percent of the market, with Google’s Home speakers picking up 29-percent.
With a recent survey from NPR and Edison Research showing that most existing smart speaker owners “wouldn’t buy another one,” it seems that the exponential growth of the market is now over.
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