Amazon Enters the Music Streaming Market
June 12, 2014
As Paul Bonanos predicted in [http://www.billboard.com/biz/articles/news/digital-and-mobile/6049214/business-matters-how-amazon-could-have-tens-of-millions] Billboard magazine on April 10, 2014, Amazon has now officially entered the music streaming market through Amazon Prime, which now boasts over one million songs (tens of thousands of albums), unlimited listening, no ads and, of course, no extra charge for Amazon Prime members. As Amazon states in its [http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1939437&highlight=] press release:
Prime members can choose exactly which songs and albums to listen to, or they can sit back and listen to hundreds of expert-programmed Prime Playlists…. Prime members can also download songs from the Prime Music catalog to their mobile devices for offline playback on planes, trains and anywhere they’re without an internet connection
Prime Music is a bit different from that of other streaming services in that Amazon won’t be providing listeners with new releases, but only music that has already been released for some months, and then only a selection of participating record companies’ catalogs. For this, Amazon was able to negotiate lump sum payments, rather than royalties based on the number of plays. For now, Universal’s releases, which account for 36.7% of the market in sound recordings, will not be included in Amazon Prime. (According to [http://www.bloomberg.com/news/2014-06-11/amazon-s-music-service-said-to-hit-snags-with-universal.html] Bloomberg, Universal considered Amazon’s lump sum offer too low.)
It remains to be seen how much money paid by Amazon to Warner Music Group and Sony Music Entertainment will filter down to their artists and whether their artists are even being advised that their music was offered as part of the deal.