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Amazon (AMZN) Pits Unlimited Music Against Spotify & Apple

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Amazon.com, Inc. AMZN launched a new on-demand, unlimited music streaming service "Amazon Music Unlimited" yesterday.

The company has expanded the song catalog from 2 million to tens of millions, thereby giving listeners access to thousands of hand-curated playlists and personalized stations.

What’s the Big Deal?

Well, it would have been no big deal if the service cost non-prime members $9.99 per month, the same as Spotify and Apple AAPL Music. But what if Prime members get this service for $7.99 per month? And what if Echo users can access this service at $3.99 per month?


Yes, Amazon has bundled these plans into the new service and intends to launch a family plan with prices comparable to that offered by Spotify.

It has made music search smarter on Echo devices that now search by artists, lyrics, decade and even by the listener’s mood.

Amazon’s basic $9.99 plan is already pitted against Spotify’s premium tier and Apple Music. But the other two options give it an edge over them in terms of price.

Earlier, competitors tried providing services in the $5 range. But their efforts turned out to be futile as their offerings remained confined to web radio, which did not allow users to play their favorite music at their convenient time.

AMAZON.COM INC Price

To Conclude

The Prime-exclusive plan seems to be a part of Amazon’s continuous effort to extend exclusive services to Prime members, thus encouraging them to spend more on Amazon.

It appears that with the Echo-exclusive plan, it is trying to make Echo more attractive to customers on the one hand and leverage on its growing popularity to sell music subscription on the other. That’s undoubtedly a smart move as it’s going to boost Amazon’s revenues either way.

The new move could also be the company’s attempt to make Alexa (the personal assistant Echo uses) smarter than Alphabet’s GOOGL Google Assistant and Microsoft’s MSFT Cortana.

Alphabet’s Google Home (that uses Google Assistant) is too new to offer smart services similar to Echo.

Cortana finds its takers in the enterprise space since Microsoft does not have a big connect with consumers when it comes to phones or tablets.

Zacks Rank

Currently, Amazon carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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