Apple Music Didn't Kill Spotify. Amazon's New Streaming Service Won't, Either.
Amazon is working on a 'Spotify killer'.
Sound familiar? Apple Music was hailed as such by basically everyone. Google's All Access was called the same, back in 2013. Even Tidal got the label.
And now it's Amazon's turn. As first reported by the New York Post, execs from Bezos-land have started chatting with the music industry about licensing, whispering details of a $9.99-per-month streaming service. The product would replace (or at least supplement) Amazon's existing digital music offering, Prime Music—which is a perk of Prime membership, more than anything else. You can stream about a million songs, but you don't get the current hits. (Digital Music VP Steve Boom commented in 2014 about today's pop not having 'staying power'; more likely it's that they want listeners to actually buy the new stuff.)
Amazon, like Apple, has something Spotify doesn't: a built-in user base. Nearly half of US households have a Prime membership, which likely explains why Prime Music tripled its streaming hours last year. But, as Apple Music teaches us, a massive pool of potential users doesn't mean an automatic toppling of the industry leader.
Yes, Apple Music has 10 million paying subscribers, about half of Spotify's current paid subscriber count. And it got there in less than six months(!). But considering there are more than 100 million iPhones in the US alone, and the service is pre-installed, that 10M number isn't quite as impressive as it first appears. Especially when you take into account Spotify's strong free tier: Apple has about 15 million users when you include those in its trial period, while Spotify (at last count) has more than 75 million active users.
Furthermore, Apple Music seems to be attracting an older audience: 62% of users under 35 canceled their subscription after the free trial. 67% of users over 35 are now paid subscribers. To be clear, I think that's a great thing. As I noted back in June, there's room in the industry for more than one streaming service. BTIG analyst Rich Greenfield told Quartz: "It appears that Apple Music has expanded the market for paid subscription music [instead of] taking share from Spotify."