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Amazon Takes on Spotify, Apple Music With $8 Monthly Music Streaming Service for Prime Members

Amazon Echo
George W. Bailey / Shutterstock

Amazon unveiled its long-rumored on-demand music streaming service Thursday, and the e-commerce giant is aiming to undercut Spotify and Apple Music with significantly cheaper prices: Amazon Music Unlimited, as the new service is being called, costs only $7.99 per month for Amazon Prime members.

Prime subscribers who prepay their music subscription for an entire year only have to pay $79, which equals $6.58 per month. For that price, Amazon Music Unlimited is promising users unlimited on-demand access to “tens of millions” of songs.

Consumers who want to use Amazon’s service without subscribing to Prime have to pay $9.99 per month, which happens to be the same price that Spotify and Apple Music are charging their paying members.

Amazon is also introducing a special tier for consumers who only want to access their music subscription on Amazon’s Echo speaker. Access to Amazon Music Unlimited from a single Echo costs just $3.99 a month.

The company is clearly betting that the Echo will help to sell music subscriptions. Consumers will be able to ask their Echo to play individual songs, entire albums, themed playlists or music a band recorded during a certain time period.

Amazon is also introducing a new collection of artist commentary dubbed “Alexa Side-by- Side” that has musicians talk about the story behind certain songs. Launch partners include the Chainsmokers, Sting, Norah Jones and One Republic, among others.

Amazon first introduced a limited streaming service dubbed “Prime Music” in 2014, which today gives Prime Subscribers access to some 2 million songs, but often lacks current releases. Prime Music isn’t going away, but it’s likely that Amazon will try to up-sell many of its existing Prime members to Amazon Music Unlimited.

Amazon’s entrance into the streaming music market comes after some strong growth for Spotify and Apple Music, which now have 40 million and 17 million paying customers respectively. It could also further increase the pressure on smaller competitors, including Jay Z’s Tidal, which has a reported 4.2 million paying monthly users.