Amazon has finally launched its Prime Music streaming service, and it features a catalog of only one million songs. But experts say small is good -- because Amazon isn't trying to kill Spotify or other music services.
Instead, the company's new streaming service is a play to boost the mainstream appeal of Amazon's $99-a-year Prime two-day-shipping service, which already includes streaming video and an e-book lending service.
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"Amazon Prime started out as a shipping service; it's evolved to offer services that we want people to interact with frequently, even daily," said Steve Boom, Amazon's vice president of digital music.
The philosophy behind Prime is now "universal appeal," Boom said, making music an obvious addition to the current lineup.
The "universal" approach is another way to describe tech companies' increasing push to retain customers in all of their activities -- from shopping to reading to streaming.
"Amazon’s goal is to get every single customer to sign up for Amazon Prime," Victor Anthony, Internet analyst at Topeka Capital Markets, told NBCNews. "This is not about Prime Music itself; it's about Prime overall."
Anthony sees Amazon as competing with Apple, Google and Facebook -- titans who are doing all they can to keep users on their own services. Prime Music is more about that overarching battle than about rivaling Spotify and Pandora in the streaming space, he said.
That's why Amazon was OK with launching Prime Music with one million songs, a catalog that clocks in far lower than the more than 20 million songs available on Spotify and Beats. (Prime Music's offering is on par with what Pandora gives its 250 million registered users, however.)
"Fundamentally, we’re not promising customers a quote-unquote comprehensive experience," said Boom, the Amazon executive. "We think the service fits with the values of Amazon Prime customers."
Prime Music's track listing includes songs from Justin Timberlake and Bruce Springsteen -- but it doesn't include artists like Jay-Z and Lady Gaga.
That's because Amazon reached signed deals with Sony Music and Warner Music Group, as well as many of the top independent labels, but it couldn't reach an agreement with No. 1 Universal Music Group (reportedly because of a disagreement over fees).
"Amazon went for the anti-model," said Russ Crupnick, managing partner of industry tracker MusicWatch.
"The super-fans who want a robust music catalog will already be paying for another service," he said. "For the rest, you don't have to have all the content to attract them. This is not the lifeblood of Amazon the way it is for music startups."
But selling goods is the focus for Amazon, and a native music service is also an attractive addition to Amazon's own devices. The company unveiled its Fire TV media-streaming box in April, and it's expected to announce a smartphone at a Seattle event on June 18.
"Music is increasingly becoming a mobile experience, or at least an app experience," Crupnick said. "To that end, building your own music service to put on your own device makes sense."
Not all of the experts are so sanguine about Amazon's move to make music a Prime-booster.
"[Prime Music] doesn’t seem particularly compelling or differentiated," said Daniel Ernst, an analyst at Hudson Square Research who follows Amazon. "Like a lot of their media efforts, we continue to think it would be better served if they separated it from Prime."
Ernst doesn't buy the dip-a-toe-in approach to the music industry, either. "If you're not number one or two in a market, why are you there at all?" he said.
Boom, the Amazon music executive, insisted that the company's focus on Prime overall doesn't mean it doesn't expect to be competitive with rivals.
"We take pride in being consumer-focused and not competition-focused," Boom said. "But we do think this will make a big splash in the music industry. We think we'll be increasing our slice of that pie."
First published June 12 2014, 8:09 AM