The rumors that Amazon.com Inc. (NASDAQ: AMZN) would start a streaming music service are true. It is part of the e-commerce company’s Prime bundle of free shipping, instant video and the Kindle lender’s library. By adding the streaming music product to Prime, Amazon can easily market to what most analysts believe is millions and millions of current customers.
Amazon says the service has over a million songs, as well as other features that consumers would expect from an offering that is up against a crowded market:
Introducing Prime Music, our new benefit that gives you unlimited, ad-free access to over a million songs and hundreds of custom-built playlists. Now you can listen to the music you love and find new music that fits your taste. It’s like having a backstage pass that lets you access your favorite musicians.
Competitors include services from Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), Pandora Media Inc. (NYSE: P) and Spotify, each of which has an established customer base. That leaves Amazon in a tough position as a late entry.
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Amazon has several advantages that might give it a chance to succeed. The first is that the service is part of Prime and carries no additional fee. Another is the nearly universal presence of Amazon.com as a portal for both e-commerce and multimedia.
Starting a music service may not be a goal in and of itself. Amazon may want to have one of the most complete multimedia offerings among its competition as part of its plan to hold a dominant position in one more category. Why bet against a company that has already done well with its forays, first into books, then consumer electronics, then tablets and e-readers and most recently video streaming?
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