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1 Inc's Prime Music Is No Threat to Pandora and Apple

I'm an Amazon (NASDAQ: AMZN  ) Prime member. I'm also a Spotify subscriber. When I heard reports that Amazon was planning to add a music streaming service to Prime, I was hopeful that I'd be able to cancel my Spotify subscription.

But after using Amazon's service, I won't be cancelling Spotify anytime soon.

Amazon's Prime Music is an interesting new perk, but it doesn't compare to other streaming music services. Although it gives Amazon Prime another selling point, I doubt it will have a meaningful effect on the music space, at least in its current form. Apple (NASDAQ: AAPL  ) and Pandora (NYSE: P  ) have little to be concerned with.

Prime Music's numerous flaws
With just over 1 million songs, Amazon Prime Music is severely lacking when it comes to catalog depth. Most of the other premium streaming music services, including Apple's Beats Music and Spotify, offer around 20 times as much music.

There's a good chance that Amazon Prime Music doesn't offer most listeners' favorite musicians. My taste in music is far from obscure, but many of my favorite bands (Arcade Fire) are not included, or if they are included, Amazon Prime offers only an album or two (Nine Inch Nails, Korn).

Amazon's service is also lacking in terms of music quality. The highest quality songs Prime Music streams are 256kbps; that may be good enough for many, but Apple's Beats Music and most of the other services are better, streaming at 320kbps.

Then there's the user interface. Whereas a service like Beats Music or Spotify offers a sort of platform for easily browsing and playing songs, Amazon Prime Music doesn't differ noticeably from its standard MP3 store. Instead of clicking on and instantly playing songs, users are required to browse through Amazon's offerings and add them to their library, just as they would if they were purchasing MP3s from Amazon. The only difference is that the songs covered by Prime Music are free.

It's easy to see why Amazon chose this path -- the company is, after all, primarily a retailer, and still intends to sell music. But in terms of presentation and functionality, Prime Music is not truly a streaming service competitor.

Discovery is limited and there's nothing free here
When it comes to new music discovery, a feature central to Pandora and Apple's Beats Music, Amazon Prime is severely lacking. Within the mobile app, there's a recommendation tab, but Amazon's suggestions include many songs that must be purchased.

Things like custom radio stations and artist recommendations are nowhere to be found. Apple's Jimmy Iovine has characterized Beats Music as helping to find "what song comes next." When a subscriber first signs up for Beats, they're prompted with a series of options designed to gauge musical tastes. Beats allows streaming music on demand, but goes out of its way to recommend songs.

Pandora, of course, is entirely based around music discovery -- its Music Genome Project is perhaps its most crucial advantage. Listeners may use Pandora partially because it's free, but also because its music algorithms allow it to deliver a steady stream of similar songs in a custom radio station format.

Amazon needs to make some serious improvements
Amazon Prime Music needs a lot of work. As it stands, I can't imagine it siphoning off subscribers from other streaming music services, or noticeably impacting the listening metrics of Pandora.

It's possible that iPhone owners who are also Amazon Prime subscribers could be tempted to shift their MP3 purchases from Apple's iTunes to Amazon's MP3 store -- some of the songs they otherwise might have planned to buy would be free for them. But that business as a whole is in decline, and may have been the primary reason why Apple purchased Beats.

Until Amazon offers more music, this is one perk I don't think many Prime users will be relying on.

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  • Report this Comment On June 17, 2014, at 9:28 AM, anonymoused wrote:

    I happen to disagree with your first premise. While your favorite artists may not be in the Amazon Prime library, most people already have albums by their favorite artists. People don't use sites like Pandora or Spotify to listen to artists they are already familiar with fully -- use it to discover new music using the artists they're already familiar with. Sure, the catalog is quite small at the moment, but the feature was just launched. And it still had all the "obscure" musicals I wanted to give a listen. It gives me a chance to listen to many different things to see what I like and what I don't.

    But Amazon DOES need to step it up to 320kbps. Discovery within the app is limited, but when adding to your library from Amazon's website, it's just like buying products: amazon knows you. It predicts your tastes based on what you've bought or added and what others who liked those things also added. Discovery IS there, but you have to be able to take advantage of it.

    The advantage Amazon Prime's music streaming has over Pandora is if you don't have Pandora One, there are no ads. But even if you do, as I do, you get to skip around and play any songs you want. Sometimes I want to listen to just a particular type of music, and Pandora will constantly skip from an artist to something COMPLETELY unrelated. I like having the choice of what EXACTLY I am listening to.

    However, this choice is still very similar to playing your own media library -- there is still action required on your part. If a feature to randomize what's available based on genre/artist/etc., Amazon Prime Music would be PERFECT and I'd definitely cancel my Pandora One subscription.

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Sam Mattera

Sam has a love of all things finance. He writes about tech stocks and consumer goods.

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