The Simple Brilliance of Amazon’s Music Play

Amazon has decided to enter the crowded music streaming game.

Quick, here’s a graphical representation of the current streaming music industry:

Everybody’s doing it. So why care about Amazon? Pandora is the OG of the streaming music game. Spotify and Rdio were game changers. Rhapsody has been around for years. Beats Music looks cool and was just bought by Apple for, well basically this:

dr-evil

I don’t think Amazon is getting into the streaming music game to compete with these services, I think they are doing it to compete with Netflix.

Right now, there are three types of people in the world: those that use Netflix, those that use Amazon Prime and cavemen.

Honestly, Netflix is better. It has a better interface. It has more options. The only reason to choose Amazon Prime right now? Free shipping.

That’s a big incentive, however. It’s the reason I currently use Amazon Prime. It’s the reason I keep using it when I curse that it doesn’t have a show or movie that I know Netflix would. It’s also a big reason why people new to the streaming video industry might choose Amazon. Now, Amazon will not only offer them a competing library and free shipping, but a streaming music service to (attempt to) rival the heavyweights in the industry? That could be a big blow to Netflix.

Using very simplistic math, if I elect to use Netflix for my video ($8.99 a month), Spotify for my music  ($9.99 a month) and pay an average of $50 a year for shipping products on Amazon, I’m spending about $277 a year. An Amazon Prime membership costs $99. Isn’t that a no-brainer?

Also, according to Time:

A Prime member now makes $1,224 in Amazon purchases each year, on average, compared with $505 for non-Prime customers. After factoring in costs incurred for shipping and streaming, the average Prime member yields Amazon $78 more in profits than other customers, according to Morningstar.

Every time Amazon converts someone to Prime, they are boosting sales of their products. It’s a brilliant little system.

Now, in its current state, Amazon Music isn’t that great. For example, I couldn’t find any Bryan Adams music, but it’s more than likely that Amazon will be expanding its streaming collection in the future. When they do, they might influence even more people to sign up.

Smart move, eh?