Amazon Launches Streaming Music Service

By Douglas A. McIntyre Published Jun 12, 6:39AM EDT

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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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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.