Amazon gears up for the launch of its own standalone music streaming service


Amazon is close to agreeing deals with some of world’s largest record labels as it prepares to launch its own music streaming service which will include a cheaper price option that could undercut the competition, it has been reported.

The online retail giant is making strategic moves to strengthen what it intends to be a direct rival to Spotify and Apple Music.

The service will match what has become the industry standard for such services with a $9.99 a month price point and could launch as early as next month, according to people familiar with the matter.

In an attempt to make headway in what has become a crowded market with Spotify, Apple, SoundCloud, Deezer, Tidal and Google Play, Amazon is also planning a cheaper service that would be streamed on Echo, its voice-controlled speaker and digital assistant, for around $5 per month.

It is likely that Amazon would pay comparable royalty rates to the music labels as Apple and Spotify currently do. Apple is understood to pay slightly higher rates than Spotify, which claims it pays around 70 per cent of its revenue to music rights holders.

Amazon customers can already buy individual songs or albums from Amazon Music, while Amazon prime subscribers can stream Amazon music, playlists and radio stations for free. The decision to form a standalone music service however follows a similar strategy to Amazon Video and comes amid streaming revenues in the US overtaking digital downloads.

Spotify and Apple Music have a clear lead over the competition, with 30 million and 15 million paying customers, respectively. However Amazon currently has over 54 million Prime subscribers and could look to tap into that subscriber base in some form in an attempt to boost its latest endeavour.

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