Amazon Readies Campaign To Take On Spotify, Apple Music
Amazon Music has grown impressively, accelerated by an explosion in Alexa smart speakers use. But, in part because the online giant seldom releases user stats, it is still portrayed in the media as somehow 'less than' Spotify or Apple Music. Amazon Music is preparing to change that perception with a star studded major ad and marketing campaign.
Online retail titan Amazon is gearing up for a major challenge to its rivals in the music streaming world. According to Bloomberg, Amazon is preparing to mount its first national television campaign for Amazon Music, with ads featuring songs by artists such as Ariana Grande, Kendrick Lamar, and Queen.
The advertising blitz is part of a larger effort that will include major media buys, from radio and television to billboards and digital content providers in the U.S., Germany, and the U.K.
Amazon appears to be banking on the leverage provided by the popularity of its Alexa interactive smart speaker system. Alexa is the dominant device in the smart speaker market and gives Amazon Music an in-home platform for music consumption.
Just how big is that market? It’s difficult to say with certainty but in January, NPR and Edison Research published a report that indicated that 16% of the adult population or about 39 million in the U.S. owned a smart speaker system.
“We’re pouring fuel on the fire,” Steve Boom, the head of Amazon Music told Bloomberg. “We have established ourselves as the leader in music services where voice is all you need to control it.”
Amazon bundles the basic version of their music streaming service, including a library of 2 million songs, as a feature Amazon Prime, their multi-faceted subscription service. In March, Amazon revealed that more than 100 million people are signed up for Prime, but how many use the music service or pay for premium access remains a secret.
Amazon still has a long way to go to catch up to the dominant players in the streaming world. Spotify boasts more than 80 million paying subscribers worldwide, while Apple has established itself as a contender, threatening to overtake Spotify in some markets. Amazon also faces competition from Google, whose streaming video service YouTube announced the launch of a music service (well, the latest iteration of a music service), and Pandora, who has transitioned away from Internet radio to a play-on-request music streaming service in the past year, all providing additional options for limited consumer dollars.
The competition will also muddy the waters for licensing, providing rights holders with more leverage in negotiations. This has already become evident in a deal the major labels struck with Amazon allowing the company to offer an introductory ‘speaker only’ steaming tier at just $3.99 a month, well below the $9.99 price point of its rivals.
“We’ve been talked about frequently as one of the future giants of music streaming,” Boom told Bloomberg. “Those days are now behind us. You can refer to us in the present tense.”