9 Reasons Apple And Google Should Be Worried About Amazon

This guest post comes from Paul Lamere of The Echo Nest and his blog Music Machinery.

image from For the last year we’ve heard rumors of how both Apple and Google were getting close to releasing music locker services that allow music listeners to upload their music collection to the cloud giving them the ability to listen to their music everywhere. So it was a big surprise when the first major Internet player to launch a music locker service wasn’t Google or Apple, but instead was Amazon.  Last week, with little fanfare, Amazon released its Amazon Cloud Drive, a cloud-based music locker that includes the Amazon Cloud Player allowing people to listen to their music anywhere.  Amazon’s entry into the music locker is a big deal and should be particularly worrisome for Google and Apple.  Amazon brings some special sauce to the music locker world that will make them a formidable competitor:

  1. Amazon can keep a secret – For the last year, we’ve heard much about the rumored Google and Apple locker services, but not a peep about the Amazon service.  The first time people heard about the Amazon Locker service was when Amazon announced it on its front page.  It says a lot about a large organization that can launch a major new product without rumors circulating in the industry.
  2. Amazon isn’t afraid to say “F*ck You” to the labels.  While Apple and Google are negotiating licensing rights for the locker service, Amazon just went ahead and released their locker without any special music license.  Amazon Director of Music Craig Pape told “We don’t believe we need licenses to store the customers’ files. We look at it the same way as if someone bought an external hard drive and copy files on there for backup.”
  3. Amazon knows how to do the ‘cloud thing’ – Amazon has been leading the pack in cloud computing for years.  They know how to build reliable, cost-effective cloud-based solutions, they’ve been doing it longer than anyone. Thousands of applications  have been deployed in the Amazon cloud from big corporations to successful startups like  dropbox. Compare to Apple’s track record for MobileMe.  Of course Google knows how to do this stuff too, but they haven’t been immune to problems.
  4. Amazon knows about discovery Amazon’s focus on discovery makes them a much better online bookstore than any other bookstore.  They use all sorts of ways to connect a reader with a book.  Collaborative filtering, book reviews, customer lists,  content search,  best seller lists , special deals.  These techniques help get their readers deep into the long tail of books.  Discovery is in Amazon’s genes.   Contrast that to how Youtube helps you find videos, or how well Apple’s Genius helps you find music.  Currently Amazon is providing no discovery tools yet with the Amazon Cloud Music Player, but you can bet that they will be adding these features soon.
  5. Amazon understand the importance of metadata – Amazon has always placed a premium on collecting high quality metadata about their media.  That’s why they bought IMDB, and created SoundUnwound. That’s why when I uploaded 700 albums to the Amazon cloud,  Amazon found album art and metadata for every single one of them. Compare that to iTunes which after nearly 10 years, still can’t seem to find album art for 90% of my music collection.
  6. Amazon does APIs – this is what I’m most excited about.  Imagine if and when Amazon releases the Amazon Cloud Music API that lets a developer build applications around the content stored in a music locker.  This will open the door for a myriad of applications from music visualizers, playlisting engines, event recommenders, and taste sharing, on our phones, on our set top boxes, on our computers..   Amazon has lead the way in making everything they do available via APIs. When they release the Amazon Cloud Music API, I think we’ll see a new level of creativity around music exploration, discovery, organization and listening.
  7. Amazon has done this before – The Kindle platform has already allowed you to do for books what the Amazon music locker does for music.  You can buy content in the Amazon store, keep it in your locker and consume it on any device.  This is not new tech for Amazon, they’ve been doing this for years already.
  8. Amazon has lots of customers – Last month Steve said he thought that Apple had more customer accounts than Amazon.  Of course that was just a guess and Steve is not impartial. Amazon doesn’t say how many customer accounts they have, but we know its a lot.   Amazon is clever in how they use the Music Locker to promote music purchases. Music you purchase from Amazon is stored for free in your locker, and when you buy an album your locker storage gets upgraded to 20GB for free.  If you buy music from Amazon
  9. Amazon seems to care – Google has accidentally  built the largest music destination on the Internet, but try to use YouTube to as a place to go and find music and you are faced with the challenge of separating the good music from the many covers, remixes, parodies and just plain crap that seem to fill the channel.  iTunes has gone from a pretty good way to play music to becoming something that I only use to sync new content to my phone. It is bloated, slow and painful to use.  In the ten years that Apple has been king of the digital music hill they’ve done little to help improve the music listening experience. Apple has moved on to video and Apps. Music is just another feature.   Contrast that with what Amazon has done with the Kindle – they’ve made a device that arguably improves the reading experience. They chose eInk over color display, they keep the non-reading features to a minimum, they give a reader great discovery tools like the ability to sample the first few chapters of any book.  I’m hopeful that Amazon will apply their same since of care for books to the world of music.

Amazon’s music locker is not perfect by any means. There’s no iPhone app. The storage is too expensive, there are no discovery or automatic playlisting features in the player.  But what they’ve built is solid and usable.  I’m also not bullish on music lockers.  I’d rather pay $10 bucks a month to listen to any of 5 million tracks than to buy tracks at a dollar each.  But I’m glad to see Amazon position itself so aggressively in this space.  The competition between Google, Apple and Amazon will lead to a better music experience for us all.

This guest post comes from Paul Lamere of The Echo Nest and his blog Music Machinery.

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  1. These are all very good points. The only problem I see with Amazon “taking over” is they don’t have a viable device to tie everything together like apple did.
    Hopefully they are working on a next generation Kindle that is more like the Nook (maybe even a KindlePhone?) that will really take advantage of Amazon’s Cloud based services. Until they do that I’m afraid that Apple has won this battle (device AND the ability to run apps).

  2. Amazon care about their customers? U obviously haven’t heard of the city link amazon prime debacle plaguing uk/rip off Britain customers. Amazons attitude has been f*** you to these customers and why I don’t shop with them anymore.

  3. In bicycle racing, the drafting position is strategically the best spot to be – unless you can stay in the lead and continually outpace your competitors. Amazon is lead here – and more importantly, willing to flatten the path legally for others to follow. Whether or not they will use their position to stay in the lead because of all the great reasons listed above, or drop behind once Apple and Google launch, remains to be seen. I’m guessing they’ve thought through the landscape carefully and fully believe they will continue to outpace all others, even if by teling the labels to drop dead, they perhaps make it easier for Apple and Google to complete their negotiations.
    It’s not clear whether Amazon’s strategy is to take customers away from Apple or merely bolster retention of their existing customer base. One thing is pretty clear though – Apple has done a terrible job with iTunes (as a listening and discovery platform) over the past five years, and Google are perennially awkward at branding and marketing. If you’re not making music feel cool no one wants to hang out – unless you offer rich and durable recommendations and meaningful community feedback and collaborative filtering. Amazon shines at this even with their dorky interface branding.
    Apple does quite well with the feel-cool factor, but promotes THEIR branding well above music enthusiasts and artist personas (eg ‘ping’). Ironically LaLa was off to a brilliant start at balancing all this, but Apple’s arrogance at shuttering it just proves that all Apple cares about is its own fingerprints & profits – and not music lovers – or artists for that matter. As Kara Swisher said at sxsw this year – “Apple is the classiest fascist company around”. Unless the culture there changes radically, they will fail in their next round of re-invention – which provides an opening for several players.
    Google is, well Google. Larry or no larry, they are algorithm kings and have all the soul of a scalable data center. Search for ’41 shades of blue’ to see what I mean. The only shot Google has is if their meta-data and community presentation is so compelling that they somehow skyrocket their conversions. But it’s becoming increasingly unclear why Google even wants into the music space at all. There’s no money there! Even with a hockey-stick conversion curve, where’s the long-term payoff for Google? They are about to undergo a wheat and chaff moment with their interminable product line. Even though they probably want to kill music, they have to launch it now given all the eyes waiting to see.

  4. Amazon is BIG in the US, Canada etc… how about the rest of the World? Google and Apple are way more popular in those areas.

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