Amazon Expands Its Free Music Tier To Everyone
Amazon has stepped up its streaming game with a new free music tier that appears to be taking on the likes Spotify. Although the company launched a free version of its music service for Alexa users on its Echo devices in April, this version will be open to users of Amazon’s smartphone app. Distribution has also expanded just from the U.S. to Germany and the UK as well.
It’s not all that it seems though as there are limitations. While many may believe that it’s exactly like the Spotify offering, it’s instead built around ‘personal radio’ focused around stations as well as key Amazon-curated playlists. These include All Hits, Fuego Latino, Country Heat and Rap Rotation as well as the Christmas-themed Holiday Favorites.
Also, as an enticement to subscribe to its Music Unlimited subscription service, upgraders are now being offered four months for just $0.99.Â
This hit Spotify where it hurts, as its stock price fell almost 5% the day after the announcement.
As I’ve stated many times before, neither Amazon nor Apple really need music, and that’s what makes them such a threat to Spotify. Amazon has deep pockets from its normal business, as does Apple, while music is the main business of Spotify, which has no way to increase its margins. The only way that it can make more money is by getting more subscribers.
With Amazon presenting a wider ranging free music tier (which no longer requires Prime membership, by the way), that’s just another way to siphon off some of Spotify’s potential growth, and Wall Street notices those things right away. While Spotify stock went down, Amazon stock prices went up about 0.5%.
