Why did Amazon launch their own music service? While we are at it, why did Apple buy Beats? And why do I think the end is near for RDIO, Spotify and the rest of the digital radio world? Listen on.
So, why do I think that Amazon and Apple will win this battle of digital radio stations? It’s simple: They are playing a different game. Spotify and Rdio and Pandora are playing to not lose. Amazon and Apple are playing to keep attention on their other products. To keep customers in their ecosystem. To bring them in through additional services but have them spend money on higher end products. Instead of trying to build a business around mobile music (and take $100 or $150/year per person), they are building on their ecosystem and being a part of that is worth much much more.
Amazon is giving their music service away as part of their Prime service for $99 per month. This means their customers get 2 day shipping and access to thousands of movies on demand, and a lending library of over 500,000 books. These services (with more to come) keeps the consumer in the amazon ecosystem, buying products while becoming a lifetime customer.
Apple is doing the same thing. The iPod introduced an entire generation of non-apple users to apple hardware (I’m one) and now they happily spend 4X the average price of a PC willingly. Ecosystem. Lifetime customer.
So let all the other digital radio stations focus on the single product while Amazon and Apple real customers in with a throw-away service called streaming music.