Amazon says it will probably hike the price of Prime, its unlimited two-day shipping service, and not everyone is happy about it. That's why Amazon might need to find ways of sweetening Prime's perks.
Prime already includes free video streaming, and now, Recode reports that Amazon may be working on Spotify-like streaming music that it could offer Prime subscribers as well. Such a service would be a spiffy add-on to its Netflix-like Instant Video app. The question is whether music would be enough to ease the pain of bumping Prime's annual rate from $79 to as much as $119, as Amazon has suggested it might do.
For a business that makes most of its money selling physical stuff, getting streaming music right could be surprisingly important to Amazon's future. Rivals Apple and Google are in many ways already well ahead in the music game, which eats into Amazon's own content-selling business. More importantly, Amazon needs to figure out how to hold onto Prime members, its most valuable retail customers. Since keeping them happy is so vital, any additional Prime offerings can't just be afterthoughts. If Amazon does music, it has to do it right.
>To really bring Prime users into the fold, maybe Amazon needs more than a music service. Maybe it needs a phone of its own
Price-wise, an Amazon streaming music service could actually help make a more expensive Prime more attractive. Premium subscriptions for Spotify and Beats go for $9.99 per month, or more than $100 yearly. If Amazon raised Prime's price by $40 but added music, that's less than half the cost of comparable music services, assuming Amazon can also offer a catalog of millions of tracks.
But cost and selection aren't the only considerations when picking a music service. Spotify and Beats compete with one another by offering distinctive and well-designed user experiences. Amazon has some experience in designing digital music interfaces with products like its cloud player, but it has never become known as a standard bearer. To make a more expensive Prime palatable, an Amazon streaming music service would need to be up to the standards set by those others.
The other issue for Amazon is that Spotify and Beats aren't really its competitors. Apple and Google are. And both of those companies already offer their own ways (iTunes and Google Play) to buy and stream music that are deeply integrated with iOS and Android. Amazon has the Kindle Fire, but it doesn't have a true smartphone platform of its own. Since phones are the dominant way of listening to music on the go, Amazon would have to depend on a streaming app running on its competitors' platforms. That wouldn't be a disaster, but it would give Amazon less control.
If the online retailer really wants to hold onto Prime members, it would make sense for Apple and Google to have as little power over mediating the Prime experience as possible. To really bring Prime users into the fold, maybe Amazon needs more than a music service. Maybe it needs a phone of its own.
