Amazon.com is well known for it's Kindle, light fasting shipping and selling virtually anything online, but now they are entering a new and growing market of streaming music. They are willing to go head-to-head with the likes of Apple and Spotify with a music streaming service, as studies show customers are increasingly abandoning digital downloads in favour of streaming music due to the better quality of music and cheaper way of accessing songs. I feel Amazon are the perfect company to get involved in this market as they're already established worldwide with around 244 million current customers meaning they can target their own customers straight away saving on marketing and advertisement costs by simply sending out an email informing each customer on the new service at the cost of nothing.
They have got the start-up capital and experts to create such a feature to make it really professional and to compete massively with the current streaming services such as Spotify and Apple.
A good thing about Amazon releasing this feature is that it adds more competition to the market, the advantages of a competitive market for me as the consumer is that businesses will constantly price cut each other trying to make their service the cheapest, along with constant quality improvement and more variety of songs as this will all try to help attract more customers such as myself. As a student myself who is very interested in music with a wide variety of taste it's important for me that I can access all these songs at a cheap price and with the introduction of Amazon music I believe it will help me achieve this.
U.S. streaming revenue grew 57 percent to $1.6 billion in the first half of 2016 so it makes sense that Amazon want to be involved in this market as it's a growing market already making astounding amounts of revenue with arguably only two main competitors; Spotify and Apple.
Launched in 2007, Amazon Prime is an annual membership programme which offers users unlimited access to a bank of movies, films, music and e-books, for a fixed monthly fee with around 63 million members. Amazon music "plans to undercut major rivals by offering members of its “Prime” service in the US a subscription for $79 a year or $7.99 a month, below the $9.99 per month charged by many of its competitors, including Spotify, Apple, Tidal and Google Play." Customers who aren't subscribed to Prime will pay $9.99 which is similar to it's competition. This is a great marketing technique of trying to encourage customers to subscribe to Amazon prime as it offers cheaper services and in the long run will help customers save money while generating huge profits for the company. Amazon chief executive Jeff Bezos said the new service, known as Amazon Music Unlimited, “brings real value to the millions of people who are already Prime members", and will also encourage them to subscribe to this streaming service rather than their current one as they're already paying for Prime allowing them to have the access to cheaper music.
I feel like Amazon are really taking advantage of the use of prime and benefiting they're regular and loyal customers by offering them this deal, it benefits both the customer and the business as the customer gets cheaper music and Amazon will generate high profits. My thoughts are that in the future they will expand this feature and offer more variety on packages and savings on money which will attract a lot more customers and I believe they will take over the streaming market ahead of Spotify and Apple in the next 5 to 10 years.
Why nobody downloads anymore? As a student myself I find streaming a lot cheaper, its more accessible and there's more variety in music. So there is no reason for me to download when streaming offers all these great qualities
As a conclusion to this I feel Amazon will fit right in this market and offer a whole new diversity to the industry and improve quality of not only there application but their competitors too and help customers maintain quality music at a cheap price. In terms of what else could Amazon music introduce in the future? I believe they could offer a music video feature where customers can see a matching music video to the song. They could provide a DJ feature which allows you to mix in your own songs and remix originals to help you get the effect like your an actual Dj. These are all features that could be introduced to help them be put one step ahead of competition and attract more customers.
Here is a SWOT analysis on Amazon music to help me evaluate the situation:
STRENGTHS
- They can use they're already established brand to promote this new feature
- If it became a success they could make a lot of marginal profit
WEAKNESSES
- They lack a Unique Selling Point
OPPORTUNITIES
- The music industry is growing rapidly
- Streaming is a lot more effective than buying and downloading music
THREATS
- There is a lot competition already who are very successful
- Artists may complain as their album sales fall again
As a conclusion to this I believe Amazon should go ahead with this new feature as I have summarized more positive than negative points.
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