Billboard is reporting that Amazon is set to start another music service, but one supported by advertising. Amazon isn’t commenting.
But if it happens, this new Amazon service could be up and running by next week, and it would stream music via Amazon’s Echo speakers just by asking Alexa for a tune, according to the music trade publication.
Amazon already offers its Amazon Prime music service free to subscribers to the Amazon Prime package, which offers streaming video and free shipping. There’s also a Music Unlimited package for $7.99 per month, with a discount to Prime subscribers.
By potentially going after an ad-supported model, Amazon is taking aim at Pandora — and even more so at Spotify, which, Billboard says, has 96 million paying subscribers to its ad-free service and 116 million to its ad-supported, free service. While Spotify struggles to reach profitability, it’s the world’s largest music service.
Right now, some Spotify users can use Alexa to play music, but only on some Echo models. Google Home also accommodates Spotify and its own music service on its smart speakers.
Billboard says as a giant distributor of goods around the world, Amazon can use the music service as a loss-leader to support other parts of its retail business. At the same time, a free Amazon music service that responds to Alexa could be a big boost for sales of Amazon Echo smart speakers.
Last week there was a Bloomberg news report that said Amazon regularly listened in on users’ private conversations. Amazon admitted it, but explained it was only to help Alexa’s voice recognition. Other times, Alexa just blurts out a line or phrase, out of the blue.
Nonetheless, according to a brand-new report from global marketing analysis firm Canalys, by 2021 there will be more smart speakers in use worldwide than tablets. The smart speaker universe will grow from about 114 million in 2018 to 208 million this year, to over 500 million by 2023, suggesting those speakers could become a potent force for advertising and music.