Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
There’s no limit to the free storage of content purchased from Amazon.
Amazon.com Inc. is leveraging its extensive array of web servers to offer consumers a free music storage and streaming service, getting a jump on similar offerings likely on the way from competitors Apple Inc. and Google.
The services Amazon announced today allow consumers to store digital content—including music in MP3 format, electronic books and movies—and to stream that content to most devices, although not Apple’s iPhone, iPod or iPad.
With Amazon’s Cloud Drive service consumers can store for free 5 gigabytes of data, enough for more than 80 hours of music. Any content purchased from Amazon.com is stored free, and does not count against the 5-gigabyte limit. In addition, anyone can purchase 20 gigabytes of storage a year for $20, and shoppers will be upgraded to the 20-gigabyte level if they purchase an MP3 album from Amazon.
The Amazon Cloud Player service lets consumers stream their books, movies and music using all the standard web browsers to Mac and Windows-based personal computers
The third service Amazon announced today, Cloud Player for Android, is bundled into a new version of the Amazon MP3 mobile app. It allows consumers to purchase content from the Amazon MP3 Store; search and browse by artist, album or song; create playlists and download music to store on Amazon’s Cloud Drive.
The mobile service lets consumers stream music and other content to mobile phones and other devices that use the Android software developed by Google. Amazon Cloud Player is not compatible with the iOS operating system used by Apple’s iPhone, iPod and iPad.
"The launch of Cloud Drive, Cloud Player for Web and Cloud Player for Android eliminates the need for constant software updates as well as the use of thumb drives and cables to move and manage music," says Bill Carr, vice president of movies and music at Amazon, No. 1 in the Internet Retailer Top 500 Guide . "Our customers have told us they don't want to download music to their work computers or phones because they find it hard to move music around to different devices. Now, whether at work, home, or on the go, customers can buy music from Amazon MP3, store it in the cloud and play it anywhere."
With these moves, Amazon is leveraging its extensive web infrastructure to cut in front of Apple and Google in offering web storage and streaming of digital content, says Colin Sebastian, an analyst at Lazard Capital Markets who follows e-commerce. “Last year, Google provided a glimpse into its pending cloud-based music service and Apple is completing a large-scale data center in North Carolina, widely expected to provide a digital locker for iTunes,” Sebastian wrote in a note to investors, referring to Apple’s online music and digital content store, iTunes.
“Streaming music has been one of the killer apps for smartphones and tablets,” Sebastian adds, pointing to the free Pandora service as the most popular in the U.S. He notes Amazon’s Cloud Player offers not only the streaming functionality of Pandora but also the ability to buy new content from Amazon.
“Amazon’s move confirms that a land grab is playing out between Apple, Amazon, Google and, more recently, Facebook, racing to secure market share in all forms of digital media: music, videos, books and other content,” Sebastian says. (Facebook recently announced a trial that lets consumers stream movies from the social network.) “Critically, the common denominator for all these services is the requirement for a large-scale web-based infrastructure, which all of these companies possess.”
Sebastian notes that Amazon has an edge because of its Amazon Web Services unit that provides other companies data storage and computing capacity. However, he says Amazon has a long way to go in the digital music space to catch Apple, which built a big lead for its iTunes online music store by making it the source of music for the enormously popular iPod music player. Apple’s iTunes still commands 70% of the digital music market in the U.S., compared to 10-15% for Amazon, Sebastian estimates.
David Fisch, director of business development at Facebook Inc., will be speaking at the Internet Retailer Conference & Exhibition 2011 in San Diego from 1:15 p.m. to 2:45 p.m. June 17 on the topic “What e-retailers need to know about Facebook.”