Amazon is looking to undercut the competition by offering a $5-a-month streaming service which is only compatible with its Echo voice-enabled wireless speaker. Spotify and Apple charge $10 a month for unlimited streaming on any device that supports the respective apps. TIDAL offers their standard “premium service” at $10 a month and a HiFi service for $20 a month. So Amazon’s new service would be half the price of any streaming service going, but would that low monthly cost be enough to balance the cost of the Amazon Echo hardware and being confined to streaming wherever the speaker is? Amazon hopes so. According to Recode, they’re planning to launch the service in September, but deals with the major music labels and publishers are still in the works and they are still back-and-forth on charging $4 or $5 for the subscription.
Other services have tried to charge in the $5 range without much success, and Pandora is also looking to offer a cheaper subscription with tiered service options at $5 and $10 a month. Although the Echo has easy portability with Bluetooth compatibility, Amazon would miss out on the 68% of smartphone users that stream music on their phones daily according to Digital Music News. An overwhelming majority of Apple Music and Spotify users sign up and run the services on their phones.
Amazon’s Echo sold well for a piece of hardware, passing a million units sold last year. The tech giant hopes to sell 3 million this year and 10 million by 2017, but even hitting those lofty goals, the service would pale in comparison to Spotify’s 100 million users, and only make them competitive with Apple Music’s 15 million. Seems like a tall order, but it will be interesting to see how the new service performs.