The market for music downloads and music streaming is currently in market competition between the tech giants of Apple and Amazon. Apple purchased Beats last month to add music streaming to its iTunes music store. It is rumored that Amazon may announce its streaming music service as early as tomorrow, according to The New York Times late today.
Amazon had raised its annual subscription fee to $99 with service for its subscriber’s Prime account who already receives free shipping on orders and other perks like free access to some movies and television shows. The addition of a music streaming service will be an enhancement for customers.
Since negotiations began around six months ago there have been leaks. Amazon told small labels that royalty of $5 million would be placed in a pool and be divided by an Amazon market-share formula.
The large labels and distributors were offered one-time payments for access to certain in demand titles with Amazon set to offer around $25 million. There is no confirmation to any of these rumors.
Sony and Warner Music are two of the labels who have signed with Amazon. There is no word from Universal whose catalog has major music giants like Lady Gaga and Katy Perry.
Beats in its purchase by Apple brought with it one of the largest catalogs in the music industry. In addition to Spotify and Rhapsody the millions of songs offer music lovers a wide choice.
Amazon has size as an advantage in music customer buyer base of 244 million active customer accounts. It also recently announced that its forecast will bring more than 20 million Prime subscribers into its customer mix.
As the market for music downloads and music streaming are coming under major market control by Apple and Amazon, Google is rumored to be in talks to acquire Songza.
Songza only has 5.5 million customers compared to a 40 million customer base for Spotify. Google is looking at Songza for its streaming music since Google’s ability with algorithms does not apply to placing music in the order to search for popularity.
Since the top technology leading companies in the world are focused on music this summer, the long term outlook raises a red flag to the future of buying a CD. The manner in which people listen to music is meeting a new era for music artists and the fan listener.