What Adding Alexa to Its Music App Gives Amazon

By Paul Ausick Updated Jan 12, 7:48AM EST · Published Sep 26, 10:10AM EDT

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What Adding Alexa to Its Music App Gives Amazon — © Thinkstock

A popular feature of Amazon.com Inc.’s (NASDAQ: AMZN) Alexa voice-control software on the company’s Echo and Echo Dot devices is its ability to understand commands to play music. Amazon has now made that feature available on smartphones running either iOS from Apple or Google’s Android.

The company rolled out the feature Tuesday morning. It allows users to ask for music based on genre, decade, mood, tempo, activity or even a snippet of a song’s lyrics if they can’t remember its name. Amazon Music app users can access the feature with the push-to-talk button on their mobile devices after they update the app.

Will this give consumers another reason to sign up for Amazon Music Unlimited at an annual subscription rate of $79 for Amazon Prime subscribers ($99 a year)? Non-Prime subscribers pay $9.99 a month. Amazon also offers the Music Unlimited service for $3.99 a month on its Echo, Echo Dot and Tap devices, but only on the one device.

Streaming music has now become the largest driver of recorded music revenues. The Recording Industry Association of America (RIAA) reported recently that in the first half of 2017 streaming revenues accounted for 62% of the total market for recorded music. That’s $2.5 billion on total revenues of $4 billion.

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By far the largest share of the industry’s revenues from streaming — $1.71 billion in the first six months of this year — comes from paid subscriptions. According to a report from music industry researchers at Midia, Amazon Music is the third largest music streaming service in the world, with a 12% share of the market compared to 40% for Spotify and 19% for Apple Music. The firm reported that 35% of Prime subscribers also pay for Music.

Adding voice-control to Amazon Music on mobile devices sets the table for an expected expansion of streaming music subscribers in countries like Japan and Germany, where sales of physical CDs remain the music industry’s largest revenue generator.

While adding Alexa to its mobile app may seem like a small thing, it could well turn out to be a big deal for Amazon in the months ahead. We’ve said it before and we’ll say it again: no one ever got rich betting against Amazon.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.