Is Amazon Music Unlimited Spotify's biggest threat yet?

Is Amazon Music Unlimited Spotify's biggest threat yet?

It’s finally here. Following months of rumour and speculation, Amazon has today made its move into the world of on-demand streaming with Amazon Music Unlimited.

Suggestions that Amazon was going to launch a $3.99 per month service had been circulating for some time, with the company keeping its cards pretty close to its chest. Today, they were finally laid on the table. And at first glance, Amazon appears to have played a pretty impressive hand.

With Spotify, Apple Music and Tidal all offering premium services at a cost of $9.99 per month, Amazon has decided to shake things up a bit by providing a multi-tiered pricing model that could prove to be a real game-changer.

There are three options available - $3.99, $7.99 (or $79 per year) and $9.99 per month. So let’s take a look at exactly what’s on offer and where Amazon is most likely to make the most significant gains.

The $3.99 subscription, while the most eye-catching, is unlikely to cause Amazon’s rivals too much cause for concern. The budget service is only available via Amazon’s Echo speakers, and as such cannot be accessed via users’ smartphones and used on the go, which is where the majority of users listen to music. It’s a cheap and potentially appealing prospect for those who already own a set of Echo speakers but is unlikely to reshape the streaming market.

The $7.99 service - also available at $79 per year - is where things get really interesting, and no doubt where Amazon will be pinning most of its hopes in the streaming war. This full Amazon Music Unlimited subscription service is available to Amazon Prime members, of which there are estimated to be some 60 million worldwide. So essentially, any of those 60 million people currently subscribing to premium services from Spotify, Apple Music or Tidal will now be able to switch over to Amazon Music Unlimited and pay $2 less per month.

The $9.99 option is a standard service in line with other streaming companies. A standard $14.99 family package is also available. At present, Amazon Music Unlimited is only available in the US, but release dates for the UK and other territories are expected to be announced before the end of the year.

While a dramatic shift in the market is unlikely to happen overnight, today’s launch could force competitors into reviewing their pricing strategies. Whether they come in the form of an overall price drop or the introduction of additional services remains to be seen.

The news may also speed up Spotify’s heavily rumoured $1bn purchase of SoundCloud. The market leader will no doubt be keen to reassure all that it is still streaming’s dominant force, and a high profile acquisition would certainly send a clear message to its rivals.

It’s also possible we’ll see movement from Apple Music and Tidal as they look to raise their game in the streaming market.

Commenting on the launch of Amazon Music Unlimited, Jeff Bezos, Amazon founder and CEO, said: “Amazon Music Unlimited brings real value to the millions of people who are already Prime members, with a choice of subscribing for only $7.99 a month or even $79 per year.

“Plus, customers are going to love Amazon Music’s all-new app for iOS, Android and desktop. And if you want a sense of the future of voice-controlled music, go ahead and ask Alexa for a free Music Unlimited trial, and play around on your Echo. If you don’t know the name of a song but know a few lyrics, if you want to hear songs from a specific decade, or even if you’re looking for music to match your mood, just ask.”

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