There’s been speculation for some time that Amazon was going to launch it’s own streaming music service to rival that of Apple Music and Spotify. While such a service could be formidable indeed, another me-too platform might not shake up the streaming landscape much. That could change if Amazon is able to launch a lower-priced service, which could be a game changer based on price alone.
Reports are that the company is considering a streaming service priced at either $4 or $5 per month, but it would only be available on Amazon’s Echo player, and not on phones or other devices. The service would have features much like its competition in that it would be fully ad-free and on-demand. Reports are that the company would also launch a $10 per month full-line service as well that would be available on all devices.
While an Echo-only service seems like a serious limitation given that Amazon has only sold a few million units so far (predictions say that there will be 4 million in use by the end of the year), it’s the precedent of breaking the $5 per month barrier that’s more important than the service itself.
Many industry analysts have railed against the standard $10 per month price point, with the premise being that the price is too high for the industry to reach the tipping point it needs to fully replace physical product. It’s long been predicted that $5 per month was the point that would reach consumers who were reluctant to subscribe at a higher price and finally have them sign on.
The $5 price point has been resisted by the major labels as being too low, and they have fought with the streaming services to keep it at $10. While that might have been a wise decision when streaming was ramping up, in order to truly grow to the heights that most in the industry believe can happen, an adjustment downward is necessary to overcome current consumer objections based primarily on price. The adoption of the proposed $5 per month of the Echo-only service would make music execs more comfortable with the idea that a lower price means more customers, enough so to make up for any perceived money being left on the table. [Read more on Forbes]