Amazon Announces Three Offerings for On-Demand Subscription Music Market

Amazon Prime members previously had access to roughly 2 million songs and a thousand playlists as part of their membership. Amazon Music Unlimited customers will have access to the service on all Amazon Music-compatible devices, a spokeswoman emailed us. Amazon will continue to offer Prime Music for free as a perk to Prime Members, she said.

Amazon will offer a family plan for up to six members for $14.99 per month, or $149 per year, launching later this year. Outside the U.S., Music Unlimited will be available for U.K., German and Austrian customers, also this year, Amazon said.

Amazon is offering a $3.99 subscription for all-you-can-listen-to access on one Echo device: Echo speaker, Tap speaker or Echo Dot. The company is pushing interaction with Alexa as a standout feature of Music Unlimited. In our brief test of the trial service, we were able to sign up to the service immediately via an Echo speaker, and Alexa, during setup, said we’d be charged $3.99 per month after the trial ended. The spokeswoman said users can cancel the 30-day trial via voice, too, removing what’s sometimes a pain point -- cancellation -- from the subscription media process. When we tried to cancel the trial, Alexa instructed us to cancel our subscription via the website instead. Trial users of the $7.99 service, had to confirm they wanted the trial to continue after the 30-day period.

To get us started with the service, the Echo automatically selected a playlist personalized for us – The Hollies -- and played “Long Cool Woman in a Black Dress,” not out of left field but a jolting transition from the Erik Satie music we had been playing before signing up for the trial. That led us to wonder if the machine-learning curve with Alexa and Music Unlimited would be a long one.

When we signed up for a trial of the full service, there was some confusion over where our Amazon Prime Music account stopped and Music Unlimited started. Amazon would only say: "Think of it as two different levels; Prime is now the introductory service and Unlimited is the full service."

Amazon is heavily promoting the interactive experience with Alexa, giving several examples of things users can ask an Echo device to take advantage of the voice engine. A user can ask Echo for “Sia,” for instance, to create a playlist of popular songs by that artist, or ask Echo to play the new song by Green Day to hear the band's latest hit.

Amazon also touted Alexa’s ability to take lyrics and find a song without a title. It worked when we asked Alexa to play the song with “Gold teeth Grey Goose” and the Echo announced it would play “Royals.” Users can ask for music by mood, decade, artist and occasion for curated playlists. Amazon offers a song of the day, available by request, that’s introduced by a DJ giving history about the tune. Wednesday’s song was Nirvana’s “Smells Like Teen Spirit” from the Nevermind album that made its debut 25 years ago -- picked to coincide with Amazon’s debut of its on-demand service.

In a research note Wednesday, Cowen and Co. analyst John Blackledge said a third of Prime households listened to Amazon Prime Music in August, trailing only terrestrial radio, YouTube and Pandora’s subscription-free, ad-supported service. Given the high usage of Prime Music among Prime members, Blackledge expects adoption of Amazon Music Unlimited to be “meaningful.” Given Amazon’s “massive scale,” Music Unlimited could well take share in the subscription music market, he said.

Cowen estimated Amazon’s Prime membership was 49 million users by August and a company survey “suggests an already high percentage of overlap” between Prime households and competing music services: Spotify at 70 percent overlap, Apple at 75 percent, and 74 percent for Pandora One (now Pandora Plus) subscribers. According to a September Cowen survey, roughly 16 percent of Prime households and 7 percent of non-Prime households owned an Echo-enabled device, suggesting an installed base of 12 million units in the U.S., Blackledge said.

Amazon redesigned its interface with the new service launch to emphasize artist images and album art with the goal of putting “music discovery and playback front and center.” Features include a “home” section that calls out trending selections and “recommended” music that’s personalized for users. A “now playing” section includes synchronized lyrics. The app is available on Fire devices, iOS, Android, Web, PC and Mac, Amazon said.

Pandora, on track to fire up its own on-demand music service before year-end, quickly responded to the Amazon news Wednesday with an app redesign announcement of its own. In a blog post, Vice President-Creative Services Tony Calzaretta revealed Pandora’s new logo and its “vibrant and bold color scheme” marking “the next phase” of product and music experiences Pandora is bringing to market. A new app icon began rolling out to users Wednesday for ad-supported and Pandora Plus users “with the fresh new look and feel coming to web and other devices over the year,” said Calzaretta.