Market Insight

Amazon brings Prime Music to UK

July 28, 2015  | Subscribers Only

Jack Kent Jack Kent Director, Media and Advertising

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Amazon has launched Amazon Prime Music in the UK, bringing a catalogue of more than one million songs to the country’s Amazon Prime subscribers. The UK launch comes a full year after the service debuted in the US and will allow access to songs without an increase in their subscription cost. Amazon’s existing digital music retail and storage offers are integrated into the new service. While existing users will receive the service, the limited catalogue of available content will limit the impact of Prime Music on existing music services in the UK.

Our Analysis:

A busy time for the on-demand music business

Amazon’s latest move follows a flurry of recent activity in the UK and wider on-demand music business. Recent service launches and updates include: Apple Music’s long awaited debut; Tidal’s re-launch following its Jay-Z backed acquisition; Spotify’s platform expansion to include video, and health and fitness features.

On-demand music subscriptions are driving growth in the UK music business and will account for 42% of all consumer revenues in 2015, up from less than 20% in 2013.

Not yet a competitor to on-demand music leaders

Prime Music will help Amazon expand and retain its Prime customer base but it is not yet a direct competitor to more established on-demand services such as Spotify, Deezer and now Apple and Tidal.  Amazon’s limited catalogue size of one million songs is mainly based on older catalogue titles and is dwarfed by the 30m+ tracks offered by Apple and Spotify.

Amazon’s integration of its existing digital music retail and cloud storage offers also means its music proposition is positioned differently from its competitors. The combination of retail and on-demand content echoes its Prime Video strategy which provides new releases for retail and rental and older catalogue content as part of an on-demand service.

Adding value to its Prime offer is Amazon’s main goal

Prime Music is not designed to compete head on with the likes of Apple and Spotify. Its main aim is instead to build Amazon’s Prime service offer which in the UK now includes video, e-book lending, free delivery, same day delivery (in London), discounts and storage. Offered at no extra cost as part of the standard £79 annual subscription, Prime Music is purely about building Amazon’s customer base rather than direct monetisation.  

Organization
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