Amazon wants to launch a music subscription service that would work the same way services from Apple, Spotify and many others work: $10 a month, for all the music you can stream, anywhere you want to stream it.
But Amazon is also working on a second service that would differ in two significant ways from industry rivals: It would cost half the price, and it would only work on Amazon's Echo hardware.
Industry sources say Amazon would like to launch both services in September, but has yet to finalize deals with major music labels and publishers. One sticking point, sources say, is whether Amazon will sell the cheaper service for $4 or $5 a month.
An Amazon rep declined to comment.
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The $10-a-month service would replicate features that used to be hard to find, but are now common: Unlimited, ad-free music you can play on any device you want and also download for offline playback.
The lower-priced service would represent a novel approach. Other services have tried, without success, to offer subscriptions in the $5 range. But those have usually been variants of web radio services, which don't let users play any song they want, whenever they want.
That's also the approach Pandora is taking with a new $5 service it has in the works, which it wants to launch alongside a standard $10-a-month service.
Amazon's discount service would be different, industry sources say, because it would work like Spotify or Apple Music — unlimited, ad-free music on demand — but it would be constrained to Amazon's Echo player, and wouldn't work on phones.
That runs counter to conventional wisdom in the music business, which believes that most people value the ability to take their music with them and play it whenever they want.
The overwhelming majority of Spotify subscribers sign up on phones. And when Apple Music launched last year it focused all of its attention on iPhone users, and eventually on Android phone owners as well.
Amazon launched the Echo — an internet-connected speaker powered by Alexa, the company's AI software — last year, and reportedly sold a million units. It hopes to sell three million this year and 10 million in 2017, The Information reports.
Amazon already offers an Amazon Music service as a free offering for Amazon Prime subscribers, but that service only has a limited catalog of music.
If Amazon launches the music services, it will be the second time it has offered digital media subscriptions as à-la-carte offerings, instead of tying them to its Amazon Prime delivery service.
Earlier this year Amazon started selling its video subscription service, which it offers for free to Amazon Prime subs, as a standalone service for $9 a month.
—By Peter Kafka, Recode.net.
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