Amazon enters music streaming with ad-supporting service & could endanger Spotify

Amazon enters music streaming with ad-supporting service & could endanger Spotify

Amazon quietly launched its ad-supported free music streaming service that will be available in millions of Alexa-enabled devices worldwide. Could this be bad news for Spotify? Well, indeed it will as we have already seen a drop in Spotify’s share from 4% to 5% last week when the rumors regarding Amazon rolling out a free music service.

But don’t misunderstand it with Amazon Music which is available to Prime members on Amazon as of now. The said service allows access to about 2 million songs while its Amazon Music Unlimited paid version starts at a price tag of $7.99/mo with access to about 50 million songs.

To put things into context, Spotify is currently the world leader in terms of music streaming with more than 207 million monthly users as of the beginning of this year with approximately 96 million paid subscribers. Spotify offers millions of songs on both its paid and free ad-supporting version that was recently launched in India and elsewhere and with the Amazon’s move to enter into this ad-supporting music streaming category, this could mean Spotify has a competitor as well.

Amazon is currently targeting its Alexa-enabled devices only where it has millions in use across the globe which is a blow to Spotify and in fact all other major music streaming services like Apple Music. Further, it could provide the same for smartphone users as well.

Talking about the music streaming giant, although it maintains the highest MAU of 207 million, it was recently outrun by Apple Music in terms of paid users in the U.S. with 28 million users while Spotify is still at 26 million in the United States. Before Apple overtook the first position from Spotify, the latter filed an antitrust complaint against Apple trying to maintain monopoly which was based on its practice of charging up to 30% of distribution charges from app developers for each in-app subscription via App Store.

In fact, Spotify broke off from App Store allowing users to make subscriptions directly from its portal without any hassle. Since Spotify and Apple Music are in an ongoing antitrust lawsuit and the former spends 70% of its revenue towards buying rights of music to stream and more, it could topple it if Amazon rises by allowing users to try it both with free and lucrative packages and this will surely add additional stress on the Swedish music streaming service for sure.

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