Rumor Fact(ory): Amazon’s music-streaming plans take shape

amazon primeAmazon, long rumored to be formulating a streaming-music service, will reportedly launch one this summer with a catalog of non-current music, according to unnamed sources.

The music service will be bundled into Amazon Prime, a subscription-only plan that cobbles together on-demand streaming movies, TV shows, and free two-day shipping of Amazon products.

Prime is unique, and fitting music into its media offering helps explain the unusual label strategy Amazon has apparently pursued. The service will not offer any tracks produced within six months — so, it’s all oldies and near-oldies. What might be considered a B-level catalog fits in with Prime’s movie service, which (like Netflix) offers films in later distribution stages, mostly long after they appear in theaters.

Amazon has reportedly reached agreement with two of the three music majors (Sony Music Entertainment and Warner Music Group), and some indies.

This strategy, if it plays out as rumored, leverages Amazon’s existing audience clout. In January, Amazon claimed 20-million members of the Prime plan. Amazon recently raised the price of Prime subscription from $79/year to $99 — arguably still an excellent value for members align with the feature set. The music service, though missing current hits and less complete than stand-alone celestial jukeboxes like Rhapsody and Spotify, adds a new dimension of value to the plan, and plausibly retains existing audience.

Brad Hill