Subscription music services have yet to show a profit, but the metrics and ad revenue numbers are heading in the right direction. So Amazon is the latest Internet media distributor to be interested in starting a subscription music service and is talking with record labels about it, sources have told The Verge:
Details are few and the talks have been described as very informal, the sources said. But so far, what Amazon has shown an interest in is an on-demand service that sounds pretty similar to Spotify, generally considered the sector leader. Others in the field include Rdio and Rhapsody, but Google and Apple are also working on their own projects. Google is reportedly in talks with record companies and music publishers about starting subscription music services for both YouTube and Google Play.
All the signs point to an arms race in the online music sector and Spotify likely touched it off. The Stockholm-based company has seen big growth and now has 6 million paid subscribers worldwide after adding 1 million since December. Spotify offers a free, ad-supported service and then charges up to $9.99 per month for an ad-free plan. The company said that it has a total of 24 million active users worldwide. What’s going to be interesting to see is how all these companies differentiate their services.
If Amazon decides to launch a subscription music service, it already has much of the infrastructure needed, including cloud music storage and its Cloud Player, which allows customers to stream songs from Amazon’s servers.