As Apple Tunes Up Music, Amazon Focuses on Music and Video Games

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Amazon Prime Music

Amazon’s Prime Music is struggling—uncharacteristically for the e-commerce behemoth—to find its foothold in a streaming music world that’s overpopulated already—and that’s before Apple’s new Apple Music streaming platform launches at the end of this month.

Since its debut a year ago, Prime Music still needs to win over millennials and the crucial demographic of younger, hipper music fans. Competing with Pandora, Spotify, Rdio, Google Play, iTunes and now Apple, Prime Music has failed to attract the core 18- to 34-year-old demographic and maintains broader usage from 35- to 44-year- olds. But does it need them?

Amazon Prime Music

“The Prime member demographic is different than other streaming services,” said Steve Boom, VP of digital music for Amazon and the head of Prime Music, to the Seattle Times.

While Boom acknowledges Prime Music has been operating “under the radar,” its comparatively low profile of millions of users still makes it the second-most-used on-demand music service after Spotify. “We’re trying to raise its profile now,” Boom said.

That includes broadening the catalog, making it accessible on more devices and ramping up discoverability. Amazon has already added Prime Stations to its Android app, and Boom wants to start adding live performances.

Prime Music customers most often come along with Amazon’s $99-a-year Prime service. They skew toward rock and country genres more than electronic dance or hip-hop, and they tend to listen to more full albums.

Amazon Prime Music

Boom is okay with his service not being hip—for now. “It’s more about adding value to the Prime membership so they become even more loyal,” he said.

Consumer Intelligence Research Partners, which tracks Prime data, estimates that Prime members spend 2.5 times as much on Amazon as non-Prime members, distinguishing it from Pandora’s ad-based business model and Spotify’s subscription model, reports the Seattle Times.

Some 41 million US Prime members spend on average about $1,100 per year compared to about $700 per year for non-members, reports the Huffington Post. So Amazon can afford to lose money on streaming music in the short term as long as its core subscribers keep shopping.

Utlimately, however, Prime Music has to appeal to music fans. Currently, “In the patchwork quilt that is Amazon, this is a patch that hasn’t gotten a lot of attention,” commented Forrester analyst James McQuivey.

Amazon Prime Music

For starters, Prime Music’s music selection is skeletal compared to offerings from rivals, primarily because Amazon has not come to terms with Universal Music Group, the world’s largest label with artists including Katy Perry, Taylor Swift, Lady Gaga and will.i.am.

McQuivey adds that Amazon’s lack of a device business driving music listening is a hurdle, given the failure of its Fire Phone.

One possible way to win millennials: get them while they’re gaming. Forecasts on the video games front are brighter as Amazon bakes gaming into its Fire TV Internet set-top box.

Indeed, Amazon Game Studios is hiring designers for “a new PC game project using the latest technology,” said Amazon senior designer Kim Swift to USA Today.

Amazon Game Studios

“Our team in Seattle has worked on a lot of great titles including Portal, Left for Dead, Half Life 2, Dota 2, World of Warcraft, Halo, Infamous, Shadows of Mordor, and many others,” noted Swift. “We want people that are driven to make the best games in the industry. We’re looking to take interesting risks, and invent!”

The Amazon Fire TV game controller sells for $39.99 and accommodates Minecraft and Grand Theft Auto: San Andreas.

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