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Amazon to Launch Paid Streaming Music Service This Summer (Report)

Amazon is looking to launch a standalone streaming music service this summer to more directly compete with Spotify and Apple Music, according to a Reuters report. The service will cost $9.99 a month, and offer on-demand access to full albums from a catalog similar to that offered by its competitors.

Amazon didn’t respond to a request for comment by Variety.

The e-commerce giant is currently running Prime Music, a streaming service that is offered free of charge to Amazon Prime subscribers. Prime Music offers access to some albums, but much of its catalog consists of older releases, and the overall size of its catalog is much smaller than that of its rivals.

It’s still unclear when exactly Amazon’s standalone service is going to launch, as the company apparently still has to finalize its deals with record labels. However, Amazon is reportedly targeting late summer or fall for a launch.

One of the main reasons for Amazon to invest in such a service is likely the surprise success of its Echo loudspeaker. Amazon hasn’t released any sales numbers for the Echo yet, but analysts estimate that the company may have sold as many as three million units of the device.  The Echo currently taps into Amazon’s Prime Music service, and also connects to Spotify for a more premium music playback experience.

Launching a paid music service would not only allow Amazon to keep some of those subscription dollars paid by Echo users, but also better defend itself against future Echo competitors: Google, which is running a paid music service of its own, announced a smart loudspeaker dubbed Google Home last month.

Amazon is entering the paid digital music space at a time of both growing excitement for subscription services as well as consolidation. Apple Music has proven to be a hit for Apple, which was able to gather more than 13 million paying subscribers since its launch a little less than a year ago. Spotify has also seen continued growth, and now has over 30 million paying subscribers worldwide.

But growth itself doesn’t always translate into healthy financials. Case in point: Streaming music pioneer Rhapsody, which just recently had been boasting about accelerated growth, confirmed layoffs Friday, with a spokesperson telling Variety: “As part of our plan to better position Rhapsody/Napster for long-term profitability and accelerated growth in a competitive global market, we have a new, streamlined structure for the company that unfortunately impacts a number of positions across our global offices.”

Hypebot reported earlier Friday that Rhapsody was closing its San Francisco office. The company declined to comment on the report, but a source told Variety that the company’s Bay Area office was indeed closing down, with staffers “being given some transition time.”

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