Who says Spotify and YouTube get to have all the ad-supported fun?
‘Ad-supported’ has become a dirty word in certain sectors of the music industry. Though that doesn’t seem to be stopping Amazon from toying with an ad-supported expansion.
The foray into free seems pretty serious. According to Billboard, Amazon has already ironed out terms with majors Universal, Warner, and Sony. Those deals may include guaranteed per-stream payments, regardless of whether a good-paying advertiser comes to the table.
As usual, publishers are getting sloppy seconds, thanks to the oddities of U.S. Copyright Law. In typical fashion, recording labels negotiate free on the open market, while companion publishers (and their represented songwriters) accept a fraction of those payouts based on pre-established statutory licensing rates.
As for the service itself, Billboard says Amazon’s free tier will featured a limited catalog. In fact, it’s likely the limited service will be positioned as a teaser for Echo users. According to emerging data, Echo devices are now handling a monstrous amount of music-related requests, including demands to play a song, clarify a song title, or pull up a playlist.
Currently, Amazon offers two streaming music tiers: Amazon Music Unlimited and Amazon Prime Music. The former features a full catalog on par with Spotify and Amazon Music, while the latter is more limited but packaged within $119/year Prime accounts.
In that mix, it’s like that Amazon’s ad-supported tier will feature the slimmest selection. That will allow users to stairstep into more premium tiers, while preventing users from straying towards Spotify, Apple Music, or other services.
Amazingly, Billboard says Amazon’s free tier could launch in a matter of days.
At this stage, we know little about the ads themselves.
One possibility is that Amazon will sell audio and visual ads similar to Spotify or Pandora. But Amazon could decide to advertise its own products, with targeting aimed at ecommerce conversions instead of lower-rent ad revenue.