Amazon is reportedly launching an ad-supported music streaming facility on Amazon Music, thereby entering the price war. Amazon Prime has been offering a 30-day trial usage to the users after which a fee of INR 129 is levied for monthly subscription and INR 999 annually. So far, the usage is entirely subscription based. The shift from Premium service to Ad-supported service will intensify its competitiveness in the Indian music streaming market.
Currently, Spotify is the only major subscription-dependent music streaming service with a free tier which offers a wide music catalogue. YouTube has also long been free around the world. The ad-supported video platform has shown no interest in converting its free users into paid customers.
Amazon Music intends to market the free music service through its voice-activated Echo speakers, with a limited catalogue availability. It could be available as early as next week. To obtain licenses for the free music, Amazon has offered to initially pay some record labels on a per stream basis, regardless of how much advertising Amazon ends up selling. This move was to emphasize on Amazon’s growth in the music market, as a distributor that can afford to discount music as a loss-leader to support its core business. Amazon hasn’t been available to comment on this yet.
Indian music streaming companies in a price war
Keeping the competition in the Indian music streaming industry in mind, Apple Music had announced a cut in its pricing. Apple Music’s Individual plan is now at par with YouTube Music Premium, Gaana Plus, Wynk, and JioSaavn Pro. The price war in the Indian streaming market is on, JioSaavn and Gaana had earlier slashed their annual subscription prices by 70 percent. To counter this, Apple Music has now made its subscription more affordable.
With the revised plans, Apple Music will now be cheaper than Swedish audio streaming platform, Spotify. Amazon Music’s entry into this price war will trigger a reaction from the competitors.
According to Consumer Intelligence Research Partners (CIRP), as of January 2019, Amazon Prime’s subscription service has surpassed the 100-million-subscriber mark and now has 101 million subscribers in the U.S alone. However, Amazon has been extremely secretive about its Prime figures, but CEO Jeff Bezos revealed in a shareholder letter in April that Prime had 100 million subscribers globally at the time.
Greg Greeley, Vice President of Amazon Prime during his India visit earlier in 2017 said,
“More Prime members joined in India than any other country in the first year.”
Amazon Prime was offered at an introductory price of INR 499 when it started in India in July 2016. After which the subscription was increased to the original level of INR 999 in a matter of days. Prime customers in India get benefits including early deliveries on products ordered on the website, TV serials and movies, discounts and deals, and Amazon Family.
Some reports estimated last year counted over 20 million subscribers across its offerings. It is expected to gain steadily due to its integration with its market-leading smart speakers.